“I want to own commodities, hard assets, and cash.” ~ Paul Tudor Jones
Legendary investor Paul Tudor Jones (PTJ) offered a bullish view of commodities in a wide ranging, pointed interview with Goldman Sachs. He also made it clear that he is negative on bonds and certainly not a fan of stocks right now as the US engages in deficit spending to fund fiscal stimulus in a low interest rate environment.
PTJ compared the current policy actions in the U.S. to the late-1960s, when interest rates were low and the government enacted fiscal stimulus measures in order to stimulate the economy and help pay for the Vietnam War. There is a key difference between now and then; the economy isn’t in recession and the U.S. isn’t involved in a massive war effort. Jones believes that “we are setting the stage for accelerating inflation, just as we did in the late ’60s.”
If PTJ is correct we should see the CRB Index break-out above 200 over the coming weeks which should lead to a quick 15%-20% rally in major commodities:
CRB (20 Year)
From a risk/reward standpoint it looks like a good time to be bullish on commodities and aligning ones investments with the likes of Paul Tudor Jones and Jeffrey Gundlach certainly doesn’t seem like a bad idea either.
According to Gundlach commodities have never been as cheap as they are now relative to stocks:
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