On Commodities, Carry Regimes & Changes in Global Monetary Regimes

From Goehring & Rozencwajg

We believe the time to buy natural resource equities has arrived. History, with its characteristic flair for the dramatic, has shown that commodity markets do not simply meander— they surge and collapse in sweeping, decade-spanning cycles. Prices can climb tenfold in a matter of years, only to later crumble, resetting the stage for the next act. Time and again, we have published a particular chart that tracks the ratio of commodity prices to stocks, using the Dow Jones Industrial Average as its benchmark. Barring the brief, COVID-induced plunge, commodities are now as undervalued relative to stocks as they have ever been. And now, fresh research suggests that the tide is about to turn—that the long-dormant natural resource bull market may be stirring once again.