http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/5.htmlVirtually the only asset class I know where the fundamentals are not impaired - in fact, where they are actually improving - is commodities. Farmers cannot get a loan to buy fertilizer right now. Nobody's going to get a loan to open a zinc or a lead mine. Meanwhile, every day the supply of commodities shrinks more and more. Nobody can invest in productive capacity, even if he wants to. You're going to see gigantic shortages developing over the next few years. The inventories of food worldwide are already at the lowest levels they've been in 50 years. This may turn into the Great Depression II. But if and when we come out of this, commodities are going to lead the way, just as they did in the 1970s when everything was a disaster and commodities went through the roof.
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I have covered most of my short positions in U.S. stocks, and I'm now selling long-term U.S. government bonds short. That's the last bubble I can find in the U.S. I cannot imagine why anybody would give money to the U.S. government for 30 years for less than a 4% yield. I certainly wouldn't. There are going to be gigantic amounts of bonds coming to the market, and inflation will be coming back.
Bear in mind that demand for some commodities--like coffee and chocolate--are "elastic"--and some--like wheat--are not. Wheat is, what, a quarter of our diet? Used to be half. Probably still is in some parts of the world. Rice is always in high demand in most parts of the world (2nd only to wheat), and we already had a temporary shortage.
And remember what rising corn prices did to prices for milk and meat.
Whaddya wanna bet nobody's opening new gold mines? And I think silver has shut down completely.
