In an interview, Jay Matulich of Septos Capital Management said that bullishness in commodities may be slowing down:
How do you pick stocks when it comes to commodities?
Matulich: I'm looking for ones that basically have high operating leverage, because once volume slows the earnings drop significantly. Just as they've gone up on the upside, it's a mirror on the downside.
What kind of timeframe are you looking at?
Matulich: I'm looking at something that started last week. If you look at industrial commodities, for the last month they're down close to 4%. So it's happening - it just hasn't hit the radar screen. So I think over the next 4-6 weeks we could see a dramatic movement. We may still be in a commodity bull market, but going on eight years of relative outperformance to the S&P 500 leads me to the think we could have some flat prices in here for the next year or so.
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