Friday, December 31, 2010

Happy New Year?

Here's a wish to you for a Happy New Year!

Wait, you say... what makes anybody think it'll be happy, at least for those of us in the wood flooring business? The pundits and corporate leaders in the trade have declared uniformly that 2011 will be a sluggish year for flooring of all kinds (see Floor Covering News dated December 6/13 - http://www.fcnews.net/ ). No particular joy there.

But did you see the copper close today? Copper prices are up 33% for 2010. Other metals prices have been strong too. But copper takes the cake.

So what?, you say. Floors aren't made of copper...

As a former professional trader, I know a few things about copper, and copper trading. Did you know that copper has always been referred to as "the metal with a PhD?" Yes, historically, copper is considered to be the vehicle for the "smart money" forecasts about industrial activity in the coming months. And copper closed the year up 33%!

This is meaningful. Oil closed up as well, gold and silver, other commodities too. But those contracts only have undergraduate degrees. Not copper. Copper has a PhD. Copper knows something.

Maybe copper simply knows that the Chinese are going bonkers industrially. But, everyone knows that! Maybe copper knows that the Chinese industrial juggernaut is going to rub off on the entire world in 2011?


I have another indicator too, a personal one. From many years of supplying and servicing the industrial wood flooring markets (trucks, trains), I have observed that the industrial flooring market turns, up or down, about six months before the general US economy. It's been like clockwork for twenty-five years, through five economic expansions and contractions. And guess what...

That market turned up last August, 2010.

Our commercial and residential wood flooring business turned upward in late November and December, 2010. That other market, the industrial market, is still screaming hot in December, 2010.

Copper, and industrial flooring, and Plantation Hardwood Floors are all shouting, "Happy New Year!"






 

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