Time to leave Agriculture market?
I think it is time to make profit in this sector. Factors to watch:
There will be more pain in this sector soon. There are significant cracks in the agricultural economy story. They have carried away with the global growth theme.''
I think agriculture index peaked in June 2008. It has rose 842 % for the last five years before it peak in June
According to leading investment houses and top analysts, agriculture stocks have developed into bubbles similar to dot com bubbles.
Farmers from Australia to China including India have increased plantings of wheat, corn, rice and soybeans. Global food crisis will end soon.
US dollar will appreciate more and more in the next 18 months.
Falling oil prices
Any other ideas. Thanks.
http://minnesota.publicradio.org/display/web/2008/05/06/farmbubble/
Answers
581 points
jillybeansisme answered 3 months ago …
I disagree. You've got Hurricane Fay and the losses there, you've got previous earthquakes, you've got the Olympics and China not allowing the rice farmers water in order to have enough for the games, global warming has depleted many bodies of water, oil prices, etc. Therefore, prices are going up, up, up and when that happens, so do the stocks of the companies in the industry. Look at Tyson Foods, YUM brands, Panera bread, to name a few. While they fluctuate, they're still on an upward trend. All of these are part of agriculture as a basis (fruit, vegetables, grains, poultry, beef, etc.). I think it is more what you invest in and when you take your profits. For example, I bought POT at $85.05 and rode it up to $246, but it then began to slide and hit my stop loss, so I got out at $200 -- it since went down to $176 and I haven't looked at it since (that's not to say it wouldn't be a good investment again). People will always need to eat even in a recession. I think agriculture is a good place to be.
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1782 points
ChaosNantuko answered 3 months ago …
I would disagree with some of your statements, such as "Global food crisis will end soon", given that a significant portion of the world has been experiance this food crisis for many decades, and as that portion of the world becomes wealthier, they will consume more, not less.
i would question other statements such as, the "US dollar will appreciate more and more in the next 18 months," because i don't believe its necessarily true (it could be, but i'm neither bullish nor bearish on the us dollar right now.)
Even still, i think your right on agriculture being a fundamentally bad option right now (given that many agricultural commodities seem to be priced significantly higher then would make sense), and it seems to be on the bring of entering a long term downtrend, so i'd say agriculture is a bad place to be.
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