market folly

This week we're exchanging interviews with Brett over at Commodity Bull Market. A few days ago, Brett interviewed us for the first leg of a 2 part interview (you can check it out here). And today, we've done the first part of his interview. Brett has been a friend of ours in the blogosphere for a while now and fills a niche in commodities. Here's part 1 of the interview:

1. Can you give us a little background about your investment
philosophy?

Sure - it's definitely evolved over the years. I started as a pure
fundamental guy, and purely stocks - Benjamin Graham, Warren Buffett were my idols. Buy cheap and sell dear.

Then I started to believe that picking the right asset class was more
important than picking the right asset. I read Jim Rogers' Adventure
Capitalist for the first time in 2004, and it was almost a religious
experience for me. He made investing sound so easy - "just look for money
sitting in the corner, and go pick it up".

Then I bought and read his instant classic Hot Commodities as soon as it
came out and thought wow, this guy is right - commodities are going to boom.
How can I get in on this?

2. So would you still call yourself a fundamentalist, just focused
more on the commodity sector?

For awhile I was - I'd look at the fundamentals of, say, sugar. Big picture
fundamentals, like year over year supply/demand trends. This is what I did
back in 2005, before I made my first purchase. If the odds looked to be in
favor of a supply deficit, I'd buy some futures contracts.

As time went on, for better or for worse, I started paying attention to the
technical picture as well. I sustained some very large losses that could
have been prevented had I employed some basic stop-loss formula. So I did
some more reading up - Winner Take All was a great book that opened my eyes,
along with Trade Your Way to Financial Freedom - and began buying during
uptrends and breakouts, and using protective stops.

Links for book reviews:
http://commoditybullmarket.blogspot.com/2007/12/book-review-winner-take-all-
by-william.html
http://commoditybullmarket.blogspot.com/2007/11/new-trading-outlook.html


3. Cool - so what inspired you to start your blog?

When I started researching commodities in early 2005, there were very few
good resources. There was Rogers' book. And there's the CRB Yearbook. But
not much covering the day-to-day, week-to-week happenings. At that time,
there was just a small blurb about commodities each day in Section C of the
Wall Street Journal - you didn't have oil all over the front pages.

So I figured I'd start up a blog, and see where it went. If nothing else, I
had made some early money trading futures, and thought that if I ended up
pissing it away, at least I should have a record of the gains to remind me
of the good times!

4. When you started blogging, did you ever imagine it'd take off like
it has?

Not at all! In fact, nobody read it other than a friend or two for the
first year. Slowly and steadily, readership has been building through the
years, and it's been a real blast. Reading about the markets is my favorite
pastime, I'd do it all day if I could! So blogging on these topics is
really a lot of fun, and I'm flattered to have developed a regular
readership.

5. Tell us a little about how you gear Commodity Bull Market towards
your readers - especially as it pertains to your personal research and
investment philosophy.

To be honest, it's something that's constantly evolving. One thing I try to
do is present both sides of an argument. For example, the
inflation/deflation argument - until recently, I'd say I was leaning
inflation, and recently have started leaning deflation. I try to present
both sides of the argument, because, both are certainly valid, and at the
end of the day nobody really knows what's going to happen anyway!

Folks seem to appreciate this, as they've expressed to me they are sick and
tired of financial analysts who insist they know the answer.

So the site, as you can tell from the name, is pretty focused on commodities
- because I still believe that's the last bull market standing. However, I
now think we're due for another potential crash in the sector, so I'm trying
to take a step back and brainstorm about ways to play potential scenarios
that unfold.

But like I said, at the end of the day, nobody really knows for sure whether
it will be inflation or deflation - so we're trying to highlight ways to
protect capital no matter the scenario, and then react profitably where
appropriate.

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Thanks to Brett for taking the time out to answer some questions and to give us a better idea as to where he comes from.