"Is there any asset class that you're excited about?" I asked legendary commodities investor Jim Rogers earlier this month.
"There are many commodities right now that are incredibly hated," I continued.
Jim interrupted me with a smile and started grabbing his suit pockets. "Sugar? Let me see, do I have my sugar on me?" he said.
Then he gave me a serious look, and said: "Get yourself some sugar."
Jim's right... Sugar is the world's cheapest, most hated commodity right now.
So is it time to buy?
To find out, let's take a look at where things stand with this asset today...
Few investors have noticed, but sugar prices have been in freefall. Sugar prices peaked in 2011 and have since fallen an incredible 68%.
A good part of that crash happened in recent years. Sugar is down more than 50% since its peak in 2016. That fall pushed prices to 10-year lows. Take a look...
Sugar prices haven't been this low since 2008 (although they came close a few years ago). And it's not surprising that investors have given up after this fantastic crash.
Sugar is hated. We can clearly see this by looking at the Commitment of Traders (COT) report for sugar...
The COT report details the real-money bets of futures traders. It's a great contrarian tool. When futures traders all agree on an outcome, the opposite often occurs.
Today, with futures traders more bearish than ever before, sugar prices could be set to soar. Take a look...
Sentiment toward sugar is wildly bearish. Investors want nothing to do with the commodity. And they're actually betting in greater numbers than we've ever seen that prices will continue to fall.
We have no historical comparison for what we're seeing right now. But we did see a somewhat similar reading in 2015...
Back then, the price of sugar had collapsed... And the COT numbers had fallen dramatically as well, reaching what was an all-time low back then.
Sugar prices bottomed just a few months later. They went on to more than double over the following year.
Based on how far sugar has fallen... and how hated it is based on real-money traders... it's easy to see why legendary commodities investor Jim Rogers quickly named it his favorite commodity right now.
I'm a bit more conservative than Jim... I would prefer to wait for the uptrend before piling in. But sugar is cheap and hated today. It's definitely worth putting on your list for upcoming buys...
Good investing,
Steve
Further Reading
"You've got to be willing to step up and bet against the crowd at extremes," Steve writes. To learn more about one of the most contrarian ideas in the world right now – and how to take advantage of it – read more here.
"If nobody wants an asset, you can buy it cheap," Dr. David Eifrig says. But before you invest in hated stocks, make sure you keep these tips in mind... Learn more here: These Three Steps Will Give You the Courage to Be Contrarian.
"Sentiment is really bad in the gold space." These are not the words you expect from the CEO of a junior gold miner. But it's a major reason why massive returns in this gold stock are possible as gold prices rally...
HIGHS AND LOWS
NEW HIGHS OF NOTE LAST WEEK
Aetna (AET)... health insurance
Pfizer (PFE)... prescription drugs
Medtronic (MDT)... insulin pumps and pacemakers
Baxter (BAX)... anesthesia, syringes, and more
Boston Scientific (BSX)... pacemakers, catheters, and stents
Berkshire Hathaway (BRK-B)... Warren Buffett's holding company
American Express (AXP)... financial giant
Visa (V)... credit cards
Mastercard (MA)... credit cards
Nike (NKE)... athletic shoes and apparel
Sony (SNE)... TVs, cameras, gaming consoles
Match (MTCH)... digital matchmaker
T-Mobile (TMUS)... telecom
Honeywell (HON)... manufacturing giant
Lowe's (LOW)... "fixer upper" stock
Sherwin-Williams (SHW)... paints and coatings
Waste Management (WM)... trash and recycling
Rollins (ROL)... "king of pest control"
Clorox (CLX)... bleach, cleaning products, and more
Kellogg (K)... Frosted Flakes, Rice Krispies, Nutri-Grain
McCormick (MKC)... Old Bay, French's, Frank's RedHot
Yum Brands (YUM)... KFC, Taco Bell, Pizza Hut
Mosaic (MOS)... fertilizer
Nutrien (NTR)... fertilizer
United Continental (UAL)... airline
Spirit Airlines (SAVE)... airline
Union Pacific (UNP)... railroads
Norfolk Southern (NSC)... railroads
NEW LOWS OF NOTE LAST WEEK
Whirlpool (WHR)... home appliances
Snap (SNAP)... social media
Scientific Games (SGMS)... slot machines, lotteries, and more
AutoNation (AN)... America's largest auto retailer
