Comments on Naveen Musunuru's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/naveen-musunuru/articles http://seekingalpha.com/article/105835-farm-real-estate-sector-headed-into-a-decline?source=feed#comment-306449 306449 Fri, 14 Nov 2008 19:48:24 -0500
With regards to Canadian farmland, far from being the cheapest in the world, it has risen dramatically in Alberta, Manitoba and Saskatchewan. As oil money dries up, so will the demand for western Canadian farmland.
For your information, per acre prices in Ontario (roughly $3500 per acre) are not that much lower than in Iowa.

Furthermore, Canadian farm debt is much higher than in the US, so there is significant risk that financing will be restricted and that will translate into lower prices per acre. As the cost of carrying the land increases, the net return shrinks.

Falling crop prices are less of an issue because inputs, such as fertlizer and fuel, have also declined dramtically.

Crop land is a solid long term investment but its value is linked to the capital markets and cannot be expected to be immune from the chaos...



]]> http://seekingalpha.com/article/105835-farm-real-estate-sector-headed-into-a-decline?source=feed#comment-306153 306153 Fri, 14 Nov 2008 12:02:42 -0500 http://seekingalpha.com/article/105835-farm-real-estate-sector-headed-into-a-decline?source=feed#comment-305192 305192 Thu, 13 Nov 2008 11:31:14 -0500
The equity and bond markets have benefited from a long period of low inflation, but ongoing and massive central bank liquidity injections point to a far less benign environment of elevated inflation ahead. Research by our firm, Agcapita Farmland Investment Partnership (farmlandinvestmentpart..., Calgary, Canada based agriculture private equity firm) shows investors must be prepared to rotate into asset classes with different characteristics. During the last commodity bull market & high inflation period in the 1970’s, equities materially underperformed farmland.
- Western Canadian farmland went from around $100/acre to $550/acre (550% total return and 176% in inflation adjusted terms);
- Cash held in a money market account barely kept ahead of inflation (6% inflation adjusted return); and the
- S&P 500 index returned less than 2% per year (a loss of almost 50% in inflation in adjusted terms)

We believe the world is still in the early stages of this current commodity bull market. When agriculture commodities prices are compared against their previous inflation adjusted highs they are significantly discounted implying scope for further increases:
- Corn is US$ 4/bushel currently compared to US$16/bushel in 1974,
- Wheat is US$ 6/bushel currently compared to US$27/bushel in 1974
- Canadian farmland is C$ 660/acre currently compared to C$1,100/acre in 1981

Another interesting metric is the long-term average ratio of the Commodities Research Bureau Index versus the S&P 500 which is currently around 1.5 times. Simplistically, this ratio indicates how much S&P 500 stock you can buy with a fixed basket of commodities. Some important points:
- During the commodity bull market of the 1970s, the ratio was consistently higher than 2 times for over 10 years – it peaked at almost 4 times.
- The ratio is currently at around 0.5 times - significantly below the 1.5 times long-term average, just slightly above the 0.15 all time low reached in 1999/2000 and still very far below the almost 4 times multiple reached in the last commodity bull market. We still appear to be at an all time low relative valuation between “hard assets" versus "stocks.”
- If history is a guide, the ratio of hard assets to stocks will have moved much higher before this commodity bull market is over.
- How? Stocks will continue to fall and/or commodities will continue to climb – most likely a serious combination of both as investors, fearing inflation, rotate out of stocks into commodities – the cycle of “inflation, rotation, hard assets”.

Agcapita allows farmland investors to cost effectively allocate a portion of their portfolios to hard assets in the form of Canadian farmland via its professionally managed Agcapita Farmland Investment Partnership. Agcapita Farmland Investment Partnership is the third in a family of private equity funds which has grown to almost $100 million in assets under management.

Agcapita’s investment team has over 40 years private equity and fund management experience and over $1 billion in total career transactions and previously managed a group of emerging market funds with almost C$500 million in assets for one of the largest banks in Europe.

Agcapita’s advisory Board is composed of accomplished agriculture entrepreneurs and academics, high profile political figures and investment experts including the former UK Chancellor of the Exchequer, Rt. Hon. Ken Clarke and Jim Rogers, co-founder of Quantum Fund. Our members bring a deep knowledge of the factors driving agriculture and farmland values – including rapidly growing emerging economy food demand and inflation.
]]> http://seekingalpha.com/article/105835-farm-real-estate-sector-headed-into-a-decline?source=feed#comment-304968 304968 Thu, 13 Nov 2008 09:22:02 -0500 http://seekingalpha.com/article/94300-unemployment-rates-recession-periods-and-stock-market-prices?source=feed#comment-248906 248906 Mon, 08 Sep 2008 22:14:21 -0400 http://seekingalpha.com/article/94300-unemployment-rates-recession-periods-and-stock-market-prices?source=feed#comment-248222 248222 Mon, 08 Sep 2008 10:02:02 -0400 We are heading lower.]]> http://seekingalpha.com/article/94300-unemployment-rates-recession-periods-and-stock-market-prices?source=feed#comment-247992 247992 Mon, 08 Sep 2008 02:11:10 -0400 http://seekingalpha.com/article/94300-unemployment-rates-recession-periods-and-stock-market-prices?source=feed#comment-247645 247645 Sun, 07 Sep 2008 14:43:52 -0400 http://seekingalpha.com/article/94300-unemployment-rates-recession-periods-and-stock-market-prices?source=feed#comment-247611 247611 Sun, 07 Sep 2008 14:07:19 -0400 http://seekingalpha.com/article/94300-unemployment-rates-recession-periods-and-stock-market-prices?source=feed#comment-247587 247587 Sun, 07 Sep 2008 13:35:38 -0400 I disagree with your conclusion unless you are a short term "investor" (speculator is more app imo). If I can grossly generalize, long term investors should buy when the market is going down and sell (way into the future) when the market is going up. Fortunately (or unfortunately depending on your perspective) most people who think of themselves as investors do what you suggest, which is to panic sell when the market is falling and buy once the market has already approached a peak, thereby absolutely minimizing their return (or in many cases realizing a negative return). But investing implies risk, and there is no perfect strategy as no one can truly know what is going to happen tomorrow, next month, next year or next decade. ]]> http://seekingalpha.com/article/94300-unemployment-rates-recession-periods-and-stock-market-prices?source=feed#comment-247573 247573 Sun, 07 Sep 2008 13:21:12 -0400 http://seekingalpha.com/article/94300-unemployment-rates-recession-periods-and-stock-market-prices?source=feed#comment-247553 247553 Sun, 07 Sep 2008 13:04:15 -0400
Notice on all other news reports, the employment figures were just released for AUGUST by the BLS. Unemployment, on the other hand was just released for JUNE. Attempting to correlate the two is sloppy and misleading.

Because of the differing methodologies within each survey, the two data series are not directly correlated in the sense that some think.


]]> http://seekingalpha.com/article/76195-an-overview-of-five-key-economic-indicators?source=feed#comment-170266 170266 Mon, 19 May 2008 21:54:03 -0400 http://seekingalpha.com/article/76195-an-overview-of-five-key-economic-indicators?source=feed#comment-164306 164306 Thu, 08 May 2008 14:25:35 -0400 http://seekingalpha.com/article/76195-an-overview-of-five-key-economic-indicators?source=feed#comment-164057 164057 Thu, 08 May 2008 09:25:21 -0400 http://seekingalpha.com/article/76195-an-overview-of-five-key-economic-indicators?source=feed#comment-163898 163898 Thu, 08 May 2008 01:57:12 -0400 http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-163766 163766 Wed, 07 May 2008 20:11:46 -0400 http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-163764 163764 Wed, 07 May 2008 20:09:01 -0400 http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-160498 160498 Fri, 02 May 2008 02:04:03 -0400 http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-158640 158640 Tue, 29 Apr 2008 11:33:48 -0400 http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-158329 158329 Mon, 28 Apr 2008 22:24:49 -0400
Corn to trade even higher...]]> http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-158297 158297 Mon, 28 Apr 2008 20:17:41 -0400 http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-158196 158196 Mon, 28 Apr 2008 17:02:58 -0400
Today's move should be reversed tomorrow (corn to drop / beans to gain).]]> http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-158138 158138 Mon, 28 Apr 2008 15:17:05 -0400 http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-158087 158087 Mon, 28 Apr 2008 13:55:03 -0400 I just saw a forecast for below temps,above rain for the Midwest for the next month......any impact?]]> http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-157861 157861 Mon, 28 Apr 2008 09:15:58 -0400