The Man in the Cheap Suit at Bloomberg’s London Headquarters

The reasoning and process: 

In a quest to hear from people directly in the industry, and ask a few of my own questions, I decided to get myself into Bloomberg’s commodity investor forum.

Funnily enough, the submission page to get a ticket did ask who I worked for. Looking at the screen, I had to chuckle knowing this could be a pitfall to my entry.

Using the overpriced credentials of an undergraduate degree as well as the very blog I am writing on now, I added “Workplace: University of Bath,” and “Role: Commodity/Market blogger”. Within a few days I landed a ticket in my inbox – total result out of a cornered position.

After having been to a previous networking event of sorts - commodities run club – I was very excited to get out there again and have a chance to be more curious. Just as a side note, the commodities run club hosted by two guys called Jakob and Fabrice was an awesome experience and great fun talking with professionals -  despite the fact I am fairly inept at running. If you work in the industry and want to get to know others – I wholeheartedly recommend their club.  

My mother jokingly said to me after telling her I was going to the forum, that people in the industry would probably be bored of seeing me and people would say “someone offer this fellah a job already” from my continued lingering. Now that would be a great outcome, but probably not the most likely way to land work experience 😂 

As my mentor M says, it’s all about showing ways you can add value to someone. Hopefully I am not seen as just lingering as that would be value detraction!

Anyways, onto my experience of the day.

What I learnt (bigger picture):

• Professionals – no matter how senior they are – ultimately are people who were once in your position. For the most part, they are willing to be generous with their time as they can appreciate others wanting to learn (especially youngsters). Top tip: people love talking about themselves, so marrying your genuine interest and someone’s role/interests is a win-win situation when it comes to striking up conversation.

• Public conventions create a fairly awkward dynamic for everyone, so use this as an opportunity to start a chat. I sensed that even if I wasn’t a youngster, standing around alone is pretty common, so I told myself the fear of talking to strangers was fairly applicable to everyone. This made it easier to go up to people – combined with the fact if I didn’t overcome my fear I would be kicking myself at missing the opportunity to talk to specific people of interest.

• There is no reason to not back yourself. I managed to follow along the concepts being discussed at the forum, was able to engage with them and have my own questions about them. It also furthered my belief that commodity trading is what I would love to do as a career, because all of the talks got me really excited and I followed hours of discussion without being bored or distracted. I can’t necessarily say this is always the same for university. 

What I learnt part 2 (specific concepts):

First talk - Discussing the presence of quantitative algorithms in commodities futures markets:

The concept of quantitative crowding becoming a feature in commodities markets was raised. Quantitative market makers and even programs triggered by fundamental signals have grown significantly over the years, and therefore how does it change trading from day-to-day? 

• Firstly, algorithms increase liquidity because of their combined volume and frequency of their orders. This of course can scale anywhere from milliseconds to days to weeks – e.g. market maker to fundamental algos. 

• Due to the speed of algorithms, they can accelerate and even change a market’s adjustment to new information. Algorithms often dampen headline peaks by rapidly pricing in fundamentals, accelerating the move to a new equilibrium and curbing prolonged overshooting (e.g. emotion-driven overselling). That said, if many models share signals or if liquidity thins, algos can also amplify the first leg before liquidity reappears—short and sharp, not long and messy.

• So, the way price gets to the end of the curve may change/look different because of algos, but the same fundamentals remain. It’s a cheap excuse to blame trading mishaps on algorithms.

Other points:

• Use of alternative data when fundamentals are sometimes overridden by chaos. Alternative data going as far as things like truth social (referring to Trump and his sudden tariff swings). 

Personal take: May sound slightly insane but I think creating an information service that processes alternative data could be interesting. Sometimes the quickest ways of picking up on news or even understanding trends can come from the ground, even before the likes of Bloomberg, Reuteurs e.t.c jumping onto it. Brief example: refinery outages or any breakdown in a supply chain could be discovered first through a program that analyses communication networks like twitter e.t.c. (I believe there are already people out there trying to create this). 

• Some people can work out what the fundamentals are saying by analysing price – sort of like the efficient market hypothesis, which proposes all available information is already buried in the ‘price’. 

I don’t really have a good idea about how someone could work backwards and dig out the fundamentals from the price – but would love to know more.  

• Brief discussion of “mean reversion of AI hype”, I interpreted this as the idea that prices, spreads and positioning that has been pushed above their long-run norms by the AI narrative could drift back once reality (actual demand/supply response) catches up. 

Not sure if there is an overreaction or a genuine structural change (meaning reversion may not necessarily happen). I assume it depends on the commodity (e.g. power, copper e.t.c.), and also if efficiency gains / project delays occur with data centres, dampening the hype.

Also ultimately depends on AI uptake, innovation and the greater economy of the world. Time will tell – check out my earlier blog post about my thoughts on AI and the energy markets in the future: https://felixwigleycommodities.blogspot.com/2025/04/oil-energy-and-price-of-progress-is-ai.html

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Second talk: The function of commodities as a hedge against inflation

• I thought this was a very interesting idea, unrelated to actual trading but more in the realms of portfolio management. Commodities can keep up with inflation as at the end of the day they are a physical product, so their asking price will go up to account for inflation of the dollar. Like any product you could find (e.g. milk at the supermarket).

So when inflation is high, having a percentage of a portfolio in commodities may be wise to curb the effects of cash holdings losing value. However, investing in commodities of course presents a risk of being exposed to volatility. A lot of commodities (e.g. metals) also tend to follow a cyclical nature in price movements, so extra attention is needed when using commodities as a hedge against inflation in regards to timing and understanding the market. 

I reckon the concept of a commodities ETF/fund would have some downsides as they would probably be based off of holding short-dated futures, which would have to be rolled each month. If the curve is in contango (later contracts more expensive than near ones), you keep selling low and buying high – this drag is called a negative roll yield. 

Also, inflation does not necessarily apply to commodities. You could have sticky inflation (e.g. services), whilst growth slows and the US dollar strengthens, pushing commodity prices down. Your hedge is not really a hedge in this situation. 

Overall, a commodities ETF could be a bit of a crude hedge for inflation depending on these factors. 

I would love to learn more about when, where and how a commodities investment as a hedge against inflation can apply. If anyone has any interesting examples where this works very effectively, please let me know in the comments!!

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Fun fact of the day: 

Historically, gold after market crashes (e.g. 2008) often initially is driven downwards from sell offs to fund margin calls and liquidate banks’ balances. It seems a bit contradictory when you just look at gold charts, but this added context makes a lot of sense.

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Conclusion:

I will keep this brief as the article has been quite a long one. 

I really enjoyed the opportunity to listen to various people in the commodities industry. I was super grateful for a lot of peoples’ time and good cheer when I asked them questions. It was motivating, and it is always nice when people who have far more experience and knowledge than you impart with their advice. 

One person in particular – Mike McGlone - who works at Bloomberg was delighted to see a youngster attend one of these events, shared some really interesting ideas with me and gave some strong words of encouragement. 

Thank you – it means a lot.