After several quiet years, commodities are stirring with intent. The Bloomberg Commodity Index has climbed to its highest level since early 2023. Copper is advancing. US natural gas has surged. Agricultural contracts have firmed, and oil has re-entered the spotlight, not quietly, but with geopolitical force.
There’s a comforting phrase investors like to repeat: “Markets get it right in the end.”
It suggests that short-term volatility is simply noise, that prices eventually converge with fundamentals, and that patient capital will ultimately be rewarded. It’s rational, reassuring, and widely accepted.
When a company issues a 100-year bond, it isn’t just raising capital; it is making a statement.
Last week, Alphabet sold a £1 billion 100-year sterling bond at a 6.125% coupon as part of a broader multi-currency debt raise totalling roughly $20 billion. Demand for the bond was nearly ten times oversubscribed.
The markets may look familiar, but the rules you grew up with? Most no longer apply.
In the 1980s, a sophisticated investor in the UK understood the game intimately: strong macro signals, long-term positioning, and an unwavering belief in the power of compounding. The playbook was clear; fundamentals ruled, gilts provided ballast, and equities delivered over time.
If you’ve been investing for a while, this probably won’t sound radical: equity markets aren’t just discounting earnings. They’re discounting a whole set of assumptions that rarely get written down. Assumptions about institutions, behaviour and continuity.
In many UK investor circles, “derivatives” still carry an image problem. For too long, options have been seen as the preserve of speculators; useful only for high-volatility plays, directional bets, or hedge fund aggression.
Every seasoned investor has scars – some wear them like medals, while others let them dictate every future move. But here’s the paradox at the heart of professional investing: the market rewards memory, but punishes emotional baggage. So, by all means, use the past as a compass, but don’t see it as a chain of connection.
In investing, intelligence isn’t in short supply. Most professional investors have the tools, models, and experience to recognise when markets are overvalued, when consensus has gone too far, or when risk is mispriced.
Cocoa prices may have cooled this festive season, but behind the drop lies a more complex market story with broader lessons for investors. Earlier this year, cocoa futures surged to over $12,000 per tonne. Today, they’ve halved, trading around $6,000. It’s a sharp correction that highlights how volatile soft commodities can be.
For the past 18 months, capital markets have rewarded companies that leaned hardest into artificial intelligence. Nvidia’s meteoric rise, Microsoft’s OpenAI partnership, and Alphabet’s pivot to Gemini have all been celebrated as smart, aggressive moves in the AI arms race. But recent tremors in the bond market suggest a new phase is beginning, one where investors are asking: how much AI investment is too much?