Stocks to buy: ETMarkets Investors’ Guide: Should you play the commodity rally through stocks?

On a tear since March last year, commodities now appear to be heading towards a new supercycle where prices rally for several years. Investment banks are now calling the bull cycle a structural one and not just a case of cyclical upturn.

For a retail investor, however, it is tough to invest in commodities directly. But investing in companies that manufacture or mine such commodities can turn out to be a good proxy bet. Is it then a good idea to hunt for such indirect plays in metals like steel, aluminium and copper or go for oil and gas stocks? Let’s find out this and more in today’s special podcast with independent market expert Rajiv Nagpal.

Welcome to the show Mr Nagpal.

1) If it is going to be the start of a supercycle in commodities, how big is the potential opportunity in commodity-related stocks for equity investors?

2) One general assumption is that if the price of a commodity moves up, the stock price of the commodity producer should also go up. Is it always so?

3) What is the best way to spot opportunities in this pocket? What valuation parameters should one use?

4) Can you explain the risks of investing in metal stocks?

Thank you Mr Nagpal. That’s all in today’s special podcast but keep checking this space for more such interesting content. Good bye!