So, if using supply and demand to dictate your investment decisions, one must take into account where the demand is coming from, and the timeframe for your 'out'.....as with $140 oil, the 'decline' in demand may come much sooner than you think.
Precisely!
As with the $140 oil, supply was artificially constrained. Unfortunately for the suppliers, they could not get supply fixing agreements to stick for long periods due to their individual greed. In the longer run, the excess of supply over demand brought the price back to more realistic levels.
With any commodity or service, over the longer term the supply demand equation will always win the day and determine price. But, too many of us get caught up with short term market fashionable beliefs. We don't think far ahead enough to see the real story and macro-trends when formulating our investment strategy.