Former trader and now academic Ivo Sarjanovic has a new book entitled, “Commodities as an Asset Class.” He was inspired to write on the topic out of frustration that investment banks were encouraging clients to invest in commodities as a hedge against inflation. Sarjanovic knew from his many years of direct experience in commodities that the advice was overly broad, and dangerously wrong if it was a passive investment in an index fund. Via his own statistical research, Sarjanovic argues agriculture may be the worst hedge since its productivity gains have been faster and the supply can be more quickly changed with one or two crop cycles. Petroleum has a better correlation with inflation than metals/minerals. Notably, he be...
Key Market Insights The broad market is locked in on this week’s Trump-Xi meeting in Beijing, but this is no longer just a trade summit. Increasingly, the meeting is becoming tied directly to Iran, energy security, and the growing global economic fallout from disruptions through the Strai...
From WPI Consulting
Communicating importance of value-added products
Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.