Have Commodities Become the New Tech Stocks?

[CONRAD DE AENLLE]

The New York Times
February 5, 2006
Investing
Have Commodities Become the New Tech Stocks?
By CONRAD DE AENLLE

RETURNING to basics has been a major theme in the markets. If investors in the late 1990's took a bold leap into the future with technology stocks — off a high ledge, as it turned out — they are now embracing age-old economic mainstays like copper, lumber, oil and gold.

A widely followed benchmark of commodity prices, the Commodity Research Bureau index, reached a record high recently after nearly doubling since late 2001. Shares of companies that supply these materials — gas pipeline operators, miners of industrial and precious metals, forest products concerns — have followed a similar trajectory, but some analysts contend that prices have risen too far, too fast.

"There are probably some areas that offer better prospects" for investors "because commodity price expectations are very high," said Stuart Schweitzer, global markets strategist at J. P. Morgan Asset Management. "I would be surprised if the commodity-type stocks are a top-performing group in 2006."

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