Panning for Gold or Gold for a Panning?

1925: The Gold Rush - Charlie Chaplin

The financial pages are becoming awash with the news that Glencore is set to float on the London stock exchange. The floatation qualifies for fast-tracking and  is expected to burst into the FTSE100 in early May. The company which is owned entirely by its managers and employees, had a turnover of $145bn in 2010.  Its main activities are the production and marketing of commodities. Glencore are selling off something like 20% of their own shares. It is estimated that this "floatation" means that the company is worth in the region of $60bn. There's about $11bn worth of the company up for grabs when it floats, that's about £6.7bn making it the largest floatation in UK history.

Whatever you read over the coming days remember that a market exists to serve both buyers and sellers. The sale of £6.7bn of shares will make several of the key staff billionaires. A key question that is prompted then is "have commodity prices peaked? - hence the sell off?"

A word of caution - those that really made money in the American gold rush  of the 1840's were the ones selling the shovels. Remember that I'm not a stockbroker, so cannot and do not give advice about individual shares. So please do not call me to ask for an opinion on buying Glencore. What I can tell you is that it will end up in most portfolios by default due to fund managers simply having to hold the stock.