Sunday, July 06, 2008

Something to Think About

"Have you imagined commodities like steel, crude oil, red chilli, pepper and gold is [sic] a highly potential [sic] investment option. Read on to see why? [sic]" begins an ad in The Times of India today. It goes on to quote figures like 47.58% for cardamom, 25.22% for gold, and 23.80% for crude as the returns in the derivatives market for these commodities, and pitches for a training course on derivatives.

Two points:
  1. Per a report by a United States Senate subcommittee entitled "The role of market speculation in rising oil and gas prices", a speculator 'does not produce or use the commodity, but risks his or her own capital trading futures in that commodity in hopes of making a profit on price changes.'

  2. The folks who enroll for the above mentioned course are already suffering from the actions of people whom they are trying to emulate ("I guess I'll have to take the public transport to attend the classes because petrol is so expensive these days. Those ^&*$ speculators!").