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<p>[QUOTE=&quot;PeacePeople, post: 1736851, member: 20082&quot;]What about this?</p><p><br /></p><blockquote><p>&nbsp; </p><p>&nbsp;&nbsp; </p><p>&nbsp;<b>This conclusion represents a significant change in view</b>.&nbsp; The last time we recommended moving to overweight was on September 30,&nbsp; 2010, or about a month ahead of the announcement of QE2 on November 3,&nbsp; 2010. In the nine months that followed (we turned neutral in June 2011),&nbsp; the S&amp;P GSCI total return index produced a 16.5% total return&nbsp; against a 14.9% total return for global equities and a 2.5% total return&nbsp; for global bonds. At the same time, downside risks today are still&nbsp; scary, especially in metals. Owning 3M 25-delta puts on crude oil,&nbsp; copper, and gold is prudent. Conventional wisdom is clearly thinking in&nbsp; spot price terms; its blind spot is failure to evaluate risk through the&nbsp; lens of structure or volatility.</p><p>&nbsp; </p><p>&nbsp;To recap, we recommend going overweight the commodities asset class&nbsp; through the strategic purchase of commodity index total return swaps. <b>Recognizing&nbsp; that the consumers are likely already starting to act on their&nbsp; incentive to buy the 20%+ swoon in gold, copper, oil, and other&nbsp; commodity markets, we recommend immediate action. </b>However, in&nbsp; acknowledgement that we are likely early in metals and possibly even&nbsp; oil, especially ahead of the more illiquid markets of the summer months,&nbsp; we also think it prudent to hedge net length by buying 25 delta puts on&nbsp; Aug-13, Oct-13, and Dec-13 NYM WTI and ICE Brent. That is a strike&nbsp; price of about $93, $89, and $87, respectively, for WTI and $100, $95,&nbsp; and $92, respectively, for Brent.</p><p>&nbsp;</p></blockquote><p>[/QUOTE]</p><p><br /></p>

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