Comments on Fund My Mutual Fund: As Asia Food Prices Bite, Analysts Warn of Worse t...

I agree with you that they should make mention of ...

2008-02-13T19:02:00.000-05:00

I agree with you that they should make mention of it (inflation) but I think they are trying to keep it under the hood right now because the more imminent problem is the housing market. I don't see market turmoil stopping until housing values bottom and the bond insurers either get entirely bought out or collapse. The problem I see is that they are trying to cure a heroin addiction (cheap money) with a lot of methadone (more cheap money). It is hard for me to tell if this approach will dampen the fall and make it manageable or just prolong that steep slice we've been anticipating.

They are trying to prevent panic and hysteria from hitting the streets by bringing two large issues to the forefront at once. Of course people like you and me don't agree with it, but I think for now we should have to accept it and adjust accordingly. Aside from that, I also think that you will probably turn out to be right in your prediction that eventually the energy and agriculture markets will start to trade more independently of the overall market. Individuals will begin to realize that they are secular bull cases revolving around supply/demand imbalances and your friend, inflation. How does this bode for infrastructure? I'm unclear on that as well. While there is some risk state and local governments might not be able to gain funding for projects, many of these companies do projects for energy companies and other countries that should keep on trucking regardless of our deficiencies. I was sad to see you shed some of my friend JEC today but I can see the reasoning.

Let's hope for some more kool aid tommorow.

Ben, still hold HOGSI only list 1% or greater posi...

2008-02-13T17:13:00.000-05:00

Ben, still hold HOGS
I only list 1% or greater positions. I have the largest amount of <1% positions I've had since beginning simply because I like the stocks, but not the stock market so I am waiting for them to pull back to add exposure - sort of like I began doing with Mastercard, and the 2 Indian Banks.

I have close to 20 positions I believe under 1% so I don't have them listed since a lot are now 0.1% or 0.2% type of positions I am awaiting a pullback on to add.

As for the inflation comments, the people are very disingenius. Fed officials have the gall to "talk about inflation" as if they care and their actions are 100% opposite. I would respect them if they at least acknowledged it like EVERY CENTRAL BANKER IN THE WORLD. :) "Look we recognize inflation is an issue, but the banking system it as risk so we are going to cut rates and flood the system with liquidity as that is job #1 right now. We'll get back to inflation later"

Last, their reporting of inflation is a total and utter joke. How can our import reports show 11% inflation? Look at our trade balance - we import almost everything into this country. So by that thesis, we import everything, our import prices are up 11% yet somehow our inflation magically is 3%? They are not dumb people.

it is just like the farce that is AAA bond insurance. We all know the bond insurers are not AAA, but we all agree to this farce (the ratings should of been slashed last summer!) so that we can keep up pretense. And hope the problem gets fixed. Because if we told the truth it would lead to a calamity.

Same goes for inflation. My other guess is these people get paid so much an extra $30 a week in grocery bills, and $15 in gas means nothing to them, whereas for working Americans in bottom 50% that extra $150-$175 a month means everything.

Essentially these Fed cuts come with a huge cost. And who gets hurt? Those with little voice and in many cases, not educated about what is going on. So its just another form of wealth transfer. The upper 2% cry about transfer of wealth through taxes but our entire Fed system in past 20 years has been about wealth transfer the other way. Keep bubbles going. Create massive wealth for those at the top. When bubble pops, cut rates, create inflation, kill savers, and help bail out the system. Sorry I just can't defend that. It is insidius. And perhaps I sound like a conspiracy theorist but I don't think it's just an innocent group of bumbling academics who don't know what they are doing because the models are wrong.

"I do think you are a little hard on the people ru...

2008-02-13T16:59:00.000-05:00

"I do think you are a little hard on the people running the show for not being mindful of inflation. By my understanding, they deal in models that remove the prices of energy and food"

The problem is that they are smart people and are allowed the deal with any models they want. When the average person can see inflation in their milk, gasoline, and bread, the people who run the show should be able to easily see it also.

Hey Mark, sort of related, just wondering if you'r...

2008-02-13T16:54:00.000-05:00

Hey Mark, sort of related, just wondering if you're still holding onto Zhongpin (HOGS). I see it's been removed from the list of holdings at right. I did some dd on the co after your post and I think it's pretty intriguing.

You've been right about this for awhile. I started...

2008-02-13T16:25:00.000-05:00

You've been right about this for awhile. I started catching on to this late last year when I was left to wonder why the agriculture sector was so hot. I played in MON for awhile and recently switched over to POT. To be frank, I really think it'll get to the point where you can't go wrong picking pretty much ANYTHING agriculturally related so long as the company isn't run by monkeys.

I do think you are a little hard on the people running the show for not being mindful of inflation. By my understanding, they deal in models that remove the prices of energy and food (which I agree is inherently stupid) and make statements based on that. I think the issue here might have less to do with their neglect of "inflation" and more to do with the inability of their archaic methods of measuring and reporting what and where inflation is really occurring. It is largely a supply/demand story that was never a problem in the past (in the US) and people tend to resist change. Regardless, you and anyone else throwing money at this are smart in getting ahead of the coming storm. Just my 2 cents.