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A Maniac Commodity Trader's Guide to Making a Fortune
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A Maniac Commodity Trader's Guide to Making a Fortune

A Not-So Crazy Roadmap to Riches

Kevin Kerr
Wiley, 2007
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Editorial Rating

6

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Recommendation

If you are looking for a strong point of view that boosts the optimists’ side of commodities trading, this is it. But Kevin Kerr’s assurance that you can make money by trading commodities does not take into account the real risks involved, and could mislead potential traders. The truth is that the odds are stacked strongly against any investor, particularly in the now nearly-extinct open-outcry pit trading that Kerr discusses at length. However, his rundown of the basic facts about the commodities markets will give you a start in learning about this arcane investment science. getAbstract suggests that it may fit in as one among many texts you might want to study before jumping into the pit.

Summary

Commodity Markets

Commodity futures provide producers and traders with a method of smoothing out price movements and a means of capitalizing on market moves. Commodity markets have their roots in ancient times when futures contracts were made primarily to actually receive or deliver the underlying commodity – for example, 200 sheep. Now, in only one out of 100 trades does a delivery settle the contract.

The world commodity markets are booming now. Demand from China, India and the United States for raw materials is pushing markets up. Look out for vulnerable commodities – those affected by global storm seasons. The hurricanes that hit the U.S. in 2005 created enormous demand for building materials for reconstruction, sugar and natural gas. Sugar is a key ingredient in the manufacture of ethanol, and the hurricanes badly affected the sugar crops in Florida, as well as the supplies of natural gas, used in heating and cooling.

You can make money in commodities. It is not difficult to predict market cycles, and in many ways commodity trading is less risky than stock market gambles. The most important commodities traded now include:

  • Gold – Gold and...

About the Author

Kevin Kerr is editor of Resource Trader and co-editor of Outstanding Investments. He is a correspondent for MarketWatch from Dow Jones, and a frequent contributor to Barron’s and the Wall Street Journal.

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