Even as the stock market seems to be coming back from a rough start to 2014, Dan Dicker of MercBloc warns that commodities are telling a much scarier story. “I’ve never seen a recovery, except for this one, that hasn’t included a rally in the base metals like copper, zinc, [and] tin,” he tells Breakout’s Jeff Macke.
In much the same way Dicker looks to coal to further back up the scenario. ”If you look over the last three years there have been no worse stocks in the world than coal stocks and miner stocks...If you can’t get a rally in coal when temperatures are below ten degrees in Atlanta during the winter, you’ve gotta give up on some of these commodities and these are scary to look at.”
For Dicker this all means that, at some point, it will all catch up with us. “There’s gonna come a time,” he says, “when interest rates go up and when the story commodities are telling us right now will turn out to be a reality and a bad one.”
So where should you hide out when the shift finally hits? “As the stock market comes down there are still quality companies to be bought that are delivering a 5% dividend.” If you want a name Dicker, who admits to liking oil, points to BP (BP).
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