One idea our guest essayist Chris Mayer likes, just as we do, is investing in what we're calling the "contrarian's commodity," natural gas.
Natural gas is used to produce fertilizers, plastics, and various chemicals. It's also a major source of fuel for firing electrical power plants and heating homes. Hippie environmentalists love the stuff because burning gas emits less than half as much carbon dioxide as burning coal.
We call natural gas the "contrarian's commodity" because huge new gas supplies have come on line recently… which has sliced the price of "natty" by more than 60% since 2008.
This beaten-down condition allowed gas to weather the huge May market selloff as well as any asset. While most stocks and commodities suffered big hits during that month – and sellers came after natty, too – it simply looked up from its position on the ground and said, "I've already sold off like crazy… I can't go down anymore." As you can see from today's chart, natural gas has built a solid "floor" around $4… and is now a contrarian's buy.
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