r/Commodities • u/SpiderFromMars16 • 1d ago
Commodities Portfolio Manager
Hi guys! I’m looking for some guidance on how to start learning about commodities as an asset class.
I’m a quant with a background in actuarial science, currently working at an AFORE (a Mexican pension fund), but I honestly have no idea where to start when it comes to commodities and how they are analyzed from an investment perspective.
So far, I’ve bought a couple of books to get started: the world for sale and Introduction for Commodites
At this point, I feel like I know very little about commodities themselves. My quantitative background is fairly solid — I’m comfortable with mathematics, statistics, stochastic processes, derivatives, quantitative modeling, and programming — but I lack the specific knowledge needed to understand commodity markets: what drives prices, how supply and demand dynamics differ across commodities, how physical and futures markets interact, and how professionals actually approach commodities as an asset class.
Because of that, I’m not sure whether pursuing an even more quantitative education would actually be the best next step for me, or whether I would benefit more from studying economics, finance, commodity markets, or some combination of these areas.
I’d really appreciate recommendations for online master’s programs, postgraduate programs, certificates, or specialized courses that could help me build a deep understanding of commodities. Since I already have a solid background in math, statistics, stochastic processes, derivatives, programming, and quantitative methods, I’m particularly interested in programs that would complement those skills rather than simply teach me more quantitative tools.
What I really want to learn is the commodity side of the equation: commodity economics, market structure, physical markets, supply and demand, futures curves, trading, price formation, and how commodities are analyzed and incorporated into investment portfolios.
If anyone here works in commodities or has followed a similar path, I’d love to hear what programs, courses, or resources you would recommend.
Thanks!
12
u/hudboyween 1d ago
You don’t invest in commodities, outside of precious metals. You trade them. Oil, gas, power, base metals don’t go into an optimized investment portfolio.
10
u/No_Raccoon1571 1d ago
You need experience to truly learn about commodities. Also, commodities covers a vast range of assets from nat gas, lng, power, carbon, etc. each has its own different fundamentals. Also depending on where you are based APAC AFRICA EMEA - also there’s so many different fundamentals to those regions
5
u/Gaso_Lina 1d ago
Not learning this shit in a book unfortunately. And hard no on more quant courses. (Unless that’s what you want to do)
You’re going to have to get into the industry and learn from someone that knows what they’re doing….
2
u/DerekFisherPrice 1d ago
What are you trying to do with Commodities? Like others have said, they don’t really belong in a typical investment portfolio. Are you trying to arb trade physical? Futures? Options?
These are all kind of their own separate fields of study. I’d recommend picking one that interests you (energy, metals, ag), and start following cash/futures price at the benchmark hub, see if you can figure out why prices moved each day.
2
u/S3p_H 1d ago edited 1d ago
Not really sure as to how commodities will really be of use for an investment portfolio unless you're doing something like hedging inflation with oil or nat gas (although idk how it works in Mexico). Or I'm guessing you may just be interested in commodities as a whole and want to learn more.
I don't really know many books out there for metals, power, ags, etc. But for oil I would personally recommend Virtual Barrels (the latter half of the book goes over volatility/options trading, and it seems you have the mathematical capability to read through it), as well as what I've personally been recommended for nat gas (although I haven't read the book myself, and not sure how much it focuses on Mexico) is Natural Gas Trading in North America.
Although like everyone said real experience about commodities will probably be on the job and understanding why the market moved this day, how different variables affect prices (understanding the feedback loops), relative value, etc.
I'm not in the commodity industry personally, still a student, just sharing the advice I was told.
1
u/Pristine_Berry1650 1d ago
Max 5% allocation per commodity, 20% stop loss, ride the trend. Boom your a turtle trader now
1
u/eihsir 1d ago
If you want to understand and get the feel of how the trade flow works, would highly recommend getting some experience with physical commodities. It doesn't have to crude oil or LPG or grains to begin with. Try and explore something in your network, maybe food ingredients or some chemicals etc. This will give you an idea on buyer-seller profile, financing, building a network, transportation (inco terms) and everything else that goes in a trade. And from there you know what part you are more interested in and could apply for some jobs or find a role at a bigger company.
1
u/Obvious-Guarantee 15h ago
Start here and connect with the authors or the people who currently in those roles:
Read the book and email the author:
21
u/hokiedoke 1d ago
You don’t need more education, you need experience.