Commodities have certainly been on the mind of investors as price gains have been astronomical since a big correction early in 2010. Agriculture stocks were up 70% since then to their recent highs, silver was up just shy of 100%, and even broad commodity indexes were up 37%. These are amazing price moves which have initiated talk of bubbles in the commodity space (which is certainly warranted regarding silver). And perhaps we have begun the inevitable bursting of the bubble as commodity prices have been plunging over the last few days. However, a look into the recent past may put this decline into context.
Anecdotally, in 2007, Blackstone Group issued their Initial Public Offering very close to the top of the buyout binge America craved in the 2002-07 bull market. Fast forward to today and Glencore could mark the top of the commodity craze that has led the market higher since 2009. Glencore is the leading integrated producer and marketer of commodities in the world. Only time will tell if the next bear market is about to begin but the similarity is eerie.