One of the most interesting articles featured on Stansberry Research is Steve Sjuggerud’s recommendation of investing in a commodity that is not liked by many, and which everyone hope to decline lower. The commodity in recommendation is coffee.
Coffee is not an interesting commodity to investors which is indicated in the Commitment of Traders (COT) account. The COT provides Stansberry Research regular weekly information on what future investors are going to do with their funds. And as per past studies, should future investors make the same wager, the opposite scenario have a great possibility of happening. Hence, traders and investors are staking their interests on lower prices of coffee. The said commodity has not seen such bearish circumstance in the past.
As portrayed by the market coffee is not just dirt-cheap but is likewise a detested commodity. It only had two bearish instances in the past, which transpired in the previous 5 years. Both instances produced big gains. Coffee had the same incident in 2015, where investors were quite certain the price would decrease but contrary to expectations it increased by forty-five percent in the following 10 months. A similar scenario happened in 2014 where investors were once again expecting the coffee prices to fall but instead went the other way.
In less than 12 months the price of coffee per pound climbed to 92%. It was an appalling incident for the traders who made bets that the prices would go lower, and which all just happened in a matter of 11 months. Due to the ensuing occurrences, the same profits can be reaped in the following 12 months or so, according to Steve and Brett of Stansberry Research.
While such incidents have transpired, there is still no official recommendation that coffee must be purchased at any time soon, since Steve prefers to buy assets whose prices are on the rise. But based on the Coffee Subindex of iPath Bloomberg, it is not still gaining any uptrend momentum. However, for investors looking to diversify their investment portfolio, coffee is an appealing outlay.
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