Introduction

Commodities are the building blocks of life. We rely on commodities to support our daily existence. From steel and copper to build our homes, gas and coal to heat them, gasoline to fuel our cars so we can travel to work and wheat and corn for food.

Most books about commodities sell you the dream that you can give up your day job and make a killing by trading soybeans. Some suggest that you should invest your pension in gold and a basket of other commodities and look forward to a prosperous retirement. The others are full of complex statistics that are impenetrable to most people. Judgments

This book is different. It aims to show you why paying attention to commodities will help you understand everything from the cost of living to geopolitical developments going on around the world and the implications for your investments. This book will give you the 50 things you really need to know.

Whether you are involved in producing commodities, buy them for your business, want to trade or invest in them or simply – like the rest of us – consume them on a daily basis, this book should have something for you. In a book that starts with “50 Things…” there is a limit to how much detail I can give, but where possible I have identified sources for further reading.

I hope that after reading this book you will see the world anew. Instead of just eating your breakfast you will be wondering what impact the latest geopolitical crisis will have on the supply of wheat for your cereal, or what impact Chinese demand will have on the price of milk. Later, on the way to work, you might hear about a hurricane in the United States (US) Gulf and suddenly think I had better fill my car up before it affects the price of oil.

Understanding commodity markets and their implications will become increasingly important over the next 50–100 years as the global population expands, environmental risks become more acute and the risk of supply disruption for businesses grows.

At the same time, the above factors – as well as many more outlined in this book – represent an opportunity. Understanding how changes in the price of a commodity affect your investments may help you make better judgments about where to place your retirement capital, as well as providing an opportunity for businesses and innovators to offer something that overcomes the latest commodity bottleneck.

This book does not have to be read as a continuous narrative. Each of the 50 things should make sense on their own, although I have highlighted where you might benefit from looking at another chapter. At the end of each chapter, I have provided a summary of “the essential thing” to take away.

On writing this book I would like to thank the coal and gas that generated the electricity that powered my laptop and lit my office late into the evening, the lithium battery in my smartphone that helped with my research and the coffee that kept me going…

Want to read the first chapter? Click here.