California Public Employees' Retirement System - Commodity Bet

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJyfMCRDfets&refer=home
The California Public Employees' Retirement System, the largest U.S. pension fund, may increase its commodities investments 16-fold to $7.2 billion through 2010 as raw materials prices surge to records.

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``We plan on ramping up the program by hiring additional staff,'' McKinley said by phone yesterday. ``We are excited about commodities, which have performed exceptionally well for us.''

Fundamentally I think commodities still have a ways to go, especially agriculture though it is has gone to far to fast and I am almost hoping for a pullback. Stuff like this though sets up for the next bubble. I think I can say with some certainity that emerging markets will perform better than most expect in the face of a U.S. economic slowdown. This will bring out people who say things have changed causing both emerging markets and commodities to overshoot. We will probably approach fair value in the next 18 months and way overshoot in the following two to three years setting up for a massive value.