Oil and gold surged over the past six months -- and have years of rising prices ahead, says Rob Lutts.
The founder & chief investment officer of Cabot Money Management offered his commodities insights -- and stock picks -- to CNBC.
"We're entering Phase II of the commodities market," Lutts said. "Phase I was denial."
Where once CEOs and analysts doubted that highs could be sustained, this "new era" will see key institutional investors "aggressively" increasing their commodities holdings on the belief that the sky is the limit, he said.
The CIO pointed to Calpers (the California Public Employees' Retirement System), which is enacting a huge expansion of its commodity portfolio: from $450 million last year to a planned $7.2 billion. And he quoted Jon Hofmeister, president and CEO of U.S. operations for Shell Oil , who told CNBC that oil prices will keep climbing.
So how should investors play the commodity bull?
On the precious metals front, Lutts pointed to GLD, a gold ETF, and to Barrick Mining.
For energy, he likes the holders of massive resource reserves, naming Western Energy, Encana and Lukoil.
And Lutts notes that the much-cheaper silver, too, is hitting a 27-year high.