Can Bob Brackett Be Stumped About Commodities?

SPEAKER_2 (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

Joe Weisenthal (0:18)

Hello, Odd Lots listeners, you are listening to a special subscribers-only bonus episode from the first time we ever interviewed this guest, Bob Brackett at Bernstein Research. We've always wanted to see if we could stump him on whether there are any commodities he doesn't know something about.

Tracy Alloway (0:34)

That's right, Bob has an almost encyclopedic knowledge of the commodities market, and so it was really fun to have him answer the audience's various questions and sometimes just tackle a single subject. The way it worked is we had people in the audience who wrote down a question or a subject on a note card and then Joe and I gathered them all up and just threw them at Bob as quickly as possible. Take a listen.

Joe Weisenthal (1:02)

Probably not a lot of people know this. It's a scandal, but he publishes this big, it's basically a book, it's like this 300-page PDF.

Tracy Alloway (1:09)

It's great. Try to get your hands on it.

Joe Weisenthal (1:12)

Yeah, but it's just like a PDF and I really think it should be published as a book because it's like the history of every commodity in the world. I learned a lot about synthetic rubber versus regular rubber from him, understanding so much. It really should be more than just like a sell side PDF, but we got a bunch of cards. Some of these questions are crazy. So we're going to try to, we're not going to be able to get through all these because we have like 15 minutes. So Bob, why don't you join us and we're going to try to stump you by asking audience questions about commodities.

Bob Brackett (1:39)

To be clear, nobody asked for this other than you.

Tracy Alloway (1:45)

All right, I'm going to start with, this is a good one, Ambergris.

Bob Brackett (1:54)

Does everyone know what this is? Yes. So we start already in sort of a lewd way.

Tracy Alloway (2:02)

This is amazing.

Bob Brackett (2:03)

So if you've ever read Moby Dick, Ambergris features there. If you're ever walking along a beach and you find something that stinks, it could be worth tens of thousands of dollars. So it is sort of a secretion that shows up on the inside of whales and eventually washes up shore. So it's priceless. It goes into perfumes. That's Ambergris.

Joe Weisenthal (2:27)

Wow. Okay. Take out the first one.

Bob Brackett (2:32)

My day job is helping people make investment advice, and I'm not sure.

Joe Weisenthal (2:37)

I don't know even. This might be a fake commodity. What is going on with the market for tellurium?

Bob Brackett (2:42)

So tellurium.

Joe Weisenthal (2:43)

So that's real. Okay. I thought that might be like someone made that as a joke. Anyway.

Bob Brackett (2:49)

Tellurium is definitely out there. These are obscure markets. What I will say at a high level, there are only four commodities on the periodic table other than hydrogen that you can really make good money off of.

Now, the spirit animal for Odd Lots is the retail investor, right? Somebody buying less than 100 shares. Oh, yeah. You're not going to get rich off of that. You're going to get rich off gold. It's 100 billion dollar a year market. You're going to get rich off of iron or aluminum and copper. That's it. Everything else is much smaller. And tellurium is toward the bottom of that list. In terms of what you do with tellurium, it's not on the critical minerals list that I'm aware of. And it's probably it's just an alloying element into steel or super alloy.

Tracy Alloway (3:31)

Okay, I'm going to keep going with the animal-related commodities. This is a specific question. This one's really hard. What was the price of guano in the year 1900?

Bob Brackett (3:43)

So guano is either a battered bird feces. Wars were fought over guano, right? So there was actually a battle between Chile and Spain for the control of the Quechua Islands, which are off of Chile. I have no idea what the price of guano would have been in 1920?

Tracy Alloway (4:03)

1900

Bob Brackett (4:04)

1900 No. So that's hard. If you want to memorize old commodity prices, gold is one because gold was pegged to the dollar.

Joe Weisenthal (4:14)

Yeah.

Bob Brackett (4:15)

I'm going to take a pass on the guano price in 1900

Joe Weisenthal (4:20)

You said enough about it. Yeah.

Tracy Alloway (4:21)

I think that doesn't count as stumping Bob.

Joe Weisenthal (4:24)

We've got to really rip through these. This is a trivia one, it sounds like. What commodity is used as a denaturant at motor fuel ethanol plants differentiating it from grain alcohol?