Comments on Fund My Mutual Fund: Bunch of Food Related Stories in FT.com as DBA Hit...

I've only sold 100 shares north of $40 and already...

2008-02-26T11:47:00.000-05:00

I've only sold 100 shares north of $40 and already regret it.

I don't know how to value it exactly. All I see is a major crisis developing so we have a both fundamental macro reason, plus Fed cuts driving liquitidity and creating a new bubble. THat bubble looks like it is going to be commodities. So while NYC bankers cheer we are going to devastate real people in the real economy, the world over. But hey NYC bankers get off and that's all the Fed is built to do anymore.

My thesis is simple. We dont have enough acres or productivity in crops in this world. When one season a crop gets overplanted to take advantage of historic pricing it will create multiple shortages elsewhere. That has been my reason to buy fertilizer stocks, and crops. As I've said, I'd be buying futures on crop land, especially in Russia, Eastern Europe if I could (where it is far cheaper than US). How do I price it? Again, I see food today as crude oil was in 2003-2004. Could you market time and sell things along the way? Yes, but the larger trend is in and you could get frozen out very quickly by trying to time it.

Just remember, Ben and friends are creating massive amounts of liquidity to bail out our system. That money needs to go somewhere. They are now in the business of creating systematic bubbles. Would you of liked to be in tech stocks in 98? Real estate in 2003? I would. So this is where we stand in this bubble. Will the thing correct? Yes. It must. But I have no idea from what level. All I know is this is the most recession proof area I can find, combined with a federal government who insists we put corn into our fuel, combined with Fed driven liquidity bubble, combined with real world macro themes, combined with potential weather related shortages that can happen any minute, any day, any month.

Or I could go buy a financial or retailer or homebuilder.

Not a tough decision on my side. I only feel sorry for the many people in the globe who are going to suffer from these bubble creating tactics by our slimy leaders and the people they are in bed with in NYC. But my job is to make money, not have feelings.

Right now I think and ETF like DBA is an excellent...

2008-02-26T08:10:00.000-05:00

Right now I think and ETF like DBA is an excellent long term play. Personally I'm not looking to take any off the table right now and am only looking to add more shares on dips.

Speculators may be pushing the prices up some, but they are not the cause of record reserve shortages, export restrictions, and the general shortages we are seeing. Unlike the RE bubble (if you've been to LV you can easily see we're not running out of land there), farmers really are having a hard time keeping up with the agg demand. The more I research this topic the more I'm thinking we are going to need a technology change sooner than later to avoid severe shortage issues with respect to food staples.

Discuss? :)

hey mark,you know I regret not pulling the trigger...

2008-02-25T23:17:00.000-05:00

hey mark,
you know I regret not pulling the trigger on this last fall when I saw multiple interviews with Jim Rogers pounding the table on agricultural commodities (since I couldn't find the Rogers agricultural index at the time). But then again I never thought it would have this kind of a run either. At the time I thought it maybe had a near-term upside of 10-15% and ceiling in the low 30's. It recently pulled to 37-38 but I was hoping it would get to ~36 before pulling the trigger. How do you value something like this? The chart has gone parabolic. Nothing goes straight up or down. Even oil and bullion's pull back once in a while and consolidate. Lets face it, theres a lot of speculative money driving commodity prices higher right now (even if the fundamentals are there to support it). At what point do you say its a little overextended and take some off the table and look for a better re-entry?