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Steel Vine Investments CEO Spencer Patton on how investors can profit from commodities, particularly in agriculture.
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-- falling after the Fed announced it will extend Operation Twist one money managers saying don't panic.
There is money to be made if you know where to look.
Spencer patent founder and CEO.
You'll find investments joining us now okay this could be a buy low sell high story certainly especially today we -- copper falling to session lows shortly after the announcement.
Not to mention gold dropping 22 dollars and saw the bargain hunters run -- Spencer but where tell us where the opportunities really are right now.
The other major opportunity that I see is in the agriculture sector that held up remarkably well today when everything else was getting clobbered.
You're seeing that agriculture particularly in soybeans and corn.
People have to eat and we're seeing more and more people on this world and then you're seeing a stronger demand for soybeans and corn especially from China -- say it's a good part of the market -- as strong fundamentals and gives you -- -- safe haven.
From all the other crazy stuff that's happening in this market I'm just wondering though we have oil -- momentum of oil which was down 3% -- huge drop in oil also drop in gold by the way whether those.
To commodities kind of -- -- -- spiral would bring down other commodities is that ever happen.
Absolutely oil is telling you something scary here oil just about to break below eighty dollars that's telling you that there is more problems here than what we're seeing.
So I'm I'm nervous mostly about the price of oil going down -- I wouldn't be -- -- -- pick the bottom here and oil.
I think you can be -- for -- gold gold.
There's going to be more money printing that we can be certain -- there's going to be more bailouts Greece had three bailouts here before it is really close to going under Spain -- really only have half of one with its banks so.
More bailouts are coming for Spain and more money is going to be -- Spencer -- are you saying avoid cocoa and I guess some asking up because one.
Bad season and not enough rain or too much rain and suddenly the price will spike do we not often -- out.
Yeah you know what I look for is with the soft commodities with coffee and cocoa and sugar of one of the first things that people cut back on when -- -- -- stops starts to drop are those luxury goods just like those -- the first things that people start to buy when they have a little bit of extra income.
So those areas are going to be the first that sell off because you you always hear about people -- and that they would give up their four dollar cup of coffee at Starbucks and and that's always what goes first.
-- with chocolate it's just not an area that's going to be recession proof -- all.
-- -- if you do get some upside in the market I think you're gonna get more upside out of the grains that have a lot stronger fundamental story.
The new -- them a market that is very tied to when people -- extra income to spend which is just not that many people worldwide right now Spencer you make a good case for gold for buying into gold do you quiet at this price -- -- about 16100 or do you wait for it to -- little further.
I think that it's it's come up 5% off its lows around fifteen point 51530.
I think that you can have a buying positions starting at about 1575.
And just -- -- incrementally on the way down I think that's one of the biggest mistakes that that the average investor makes as they try and put all of their money and at one point and really pick a bottom.
And that's just not a -- great way to invest because more times than not you're gonna have a chance to -- lower and so I think that you could start here if you felt good about gold.
And by ten or 25% year position.
And an average of that goes down I think that's a great way to be able to buy and the gold here but I think there's a strong floors 1525.
-- this kind of economic environment sort of a temporary at dollar cost averaging thanks Spencer.
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