Brad Zigler

Ag Stocks Still Outdoing Ags

The fatal flaw is the time assumption. Investment horizons for rmany investors don't allow the time needed to clawback large losses. Funding needs for such events as retirement, home purchases and tuition payments may be near term.



On Jun 12 08:52 PM E.D. Hart wrote:

> If the NAV of a business is $45 per share, and the shares trade at
> NAV, and the shares lose 10%, who cares if the market has to claw
> back 11%?
>
> Over time the market is a weighing machine...so that 11% is not greater
> than 10% as hard as that is to comprehend, its a return to a NAV.
> It doesn't matter.
>
> Commodities are volatile, and Treasuries are less so. Nevertheless,
> treasuries are much more risky than commodities.(assuming no leverage
> is used) because of the environment of quantitative easing.
>
> If you had to invest all of your net worth for ten years, and lock
> it away, and you could only choose T-bills, or gold--what would you
> choose?
>
> I'm going with gold, and I'm not a gold bug, I'm a dollar bear. What
> do I care if gold is highly volatile?
>
> Risk is about 100% that you will lose money after inflation in t-bills,
> in spite of their so called "safety", and low volatility. I'm guaranteed
> to lose my money slowly with low volatility. What a deal.
>
> Also, what do I care if oil prices are volatile if the supply/demand
> fundamentals are highly favorable to higher oil prices? The risk
> is almost nil that oil will be cheaper in ten years, but the volatility
> will be all over the map. Again, volatility is not risk of loss of
> capital.

Ag Stocks Still Outdoing Ags

Volatility IS risk. More particularly, downside volatility, as measured by the Sortino rato, is. Keeping the size of your maximum drawdown small demands less of a market recovery to reach breakeven.

After a 10% loss, for example, an 11% recovery is needed to break even; after a 50% loss, a 100% clawback is required.


On Jun 11 04:19 PM predictorman1000 wrote:

> Great article. I am in an IRA so that precludes me from directly
> shorting.
>
> My problem with the short ETFs is that I have been burned EVERY time
> I have owned them. Some of it is market manipulation, and I have
> no reason to believe that can't happen with these also. Also if you
> are holding a short ETF long term, the decay kills you.
>
> I don't trust ETNs, let alone short ETNs. I have owned both, but
> got out once I understood what was underlying them. A scandal waiting
> to happen.
>
> I own both DBA and MOO and I'll rely on market momentum and swallow
> the risk. In this market the risk is not being on board (I know people
> don't like to here it but it's true- it just doesn't seem to want
> to correct).

Coffee Sweeter than Sugar

Milk prices have actually been ratcheting down (some 26%) since peaking in late March.

We track the wholesale trend in milk, and seven other common breakfast items, in Hard Assets Investors' monthly Breakfast Index (published coincidentially with the Consumer Price Index report; see our last iteration, "CPI At Breakfast: Coffee Talk" at www.hardassetsinvestor...).

A Good Thing: Agribusiness Future Isn't Golden

It's the very fact that they ARE different that makes the relationship significant.

Ask yourself this: why would investors vote with their feet and dollars bymoving from gold to nonfinancial commodities?


On May 04 05:40 AM Libourne wrote:

> What a load of "Tosh"............how can you compare two very different
> ETFs?
> One feeds the other does not if you get my drift.

A Good Thing: Agribusiness Future Isn't Golden

Sector rotation in commodities isn't novel. Gold's a safe haven play not necessarily associated with price inflation. Rotating out of gold and into nonfinancial commodities is indicative of a changing perspective on risk.

A Good Thing: Agribusiness Future Isn't Golden

What your seeing what is usually referred to as "sector rotation." Capital is now embracing risk rather than averting it. And THAT's an important economic bellwether.

Steel Yourself for Earnings Season

Earnings surprises today consistent with the recent outperformance of the steel index over agribusiness: Terra Industries (TRA) earned 30 cents a share, 30% less than consensus expectations; AK Steel Holding (AKS) lost only 67 cents a share, a loss 11% smaller than Street forecasts.

Is Monsanto a Template for Agribusiness?

Hello?

Commodity sectors that didn't languish whilst agricultrals stagnated include precious metals, reflected in the November-to-February gains earned by the PowerShares DB Precious Metals ETF (DBP) and base metals proxied by exchange-traded products such as the PowerShares DB Base Metals ETN (BOS), which rallied in the fall and winter.


On Apr 04 08:35 AM anopenmind wrote:

> ..."the entire ag sector represented by the fund (seekingalpha.com/symbo...)
> have been languishing in a trading range since last fall."...Hello.
> Has not most other segment funds languished since last fall? Still,
> when we look at major individual stocks in the fund, any that have
> not performed well in past, have pretty good balanced sheets today,
> and very likely will perform well during next several years? This
> segment is not the U.S. autos, airlines, nor many other segments
> that may need years before getting out of ruts. Perhaps Y2009 less
> product will be consumed, as population continues to grow, but Y2010
> and beyond?

Food Prices Continue to Deflate

Well, for one thing, you're looking at wholesale prices here. The farther removed from the source you are in the supply chain, the less volatile prices are. That means it takes longer for trend reversals to show up in consumer prices.

You also must allow for geographic differences. At the consumer level, the degree of competition in the market is often a price determinent.

More Seeds Sown for Agribusiness

You could say that that's already happening, if only on a de facto basis.

Compare the value of gold priced in Swiss franc versus the US dollar. This year, the CHF price trajectory has been steeper than that of USD's.


On Mar 14 07:31 AM BigOlDave wrote:

> What happens to SYT when the Swiss intervene to stop "negative inflation"?