London, September 2010

Forecasting & speculation

Too many investors and commentators still believe certain experts can foretell the future accurately. But there is no evidence any analyst or investment manager can consistently predict the future with a significant degree of accuracy.

Speculation as Risk Transfer: There is more common ground than many realise. More or less everyone accepts the primary functions of commodity markets are (1) to facilitate price discovery and (2) to facilitate hedging of physical and perhaps financial risks. Enabling speculators to profit from short and long-term price movements by anticipating them correctly is not a primary function. It is a secondary one that supports the realisation of the primary goals.

By Commodities Now

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