fxtrader07

Potash Heats Up: $1000 a Tonne?

many oil stocks are priced for crude at $90/bl as the stock market has not yet agreed on a permanent $110+ oil price. stocks like POT REQUIRE a further rise to $1000/t and beyond to justify current lofty P/E ratios. as usual, people chase 'grwoth' and overpay for it, extrapolating 'trends' but those trends may turn any time. In turn, lower growth but more defensive stocks like oil and gas stocks get sold even further.
gl with your POt/MOS positions - but to me there is simply too much downside risk. when the momentum folks and hedgies pile out, all of a sudden you will hear plenty of reasonable arguments why the stocks were too high. it#s risk-reward and to those citing the 'structural' argument with potash prices: structural arguments are always there. just perception change. $1000/t+ for potash prices? probable. but 2-3 years out? 1.500$ or 500$? makes the difference for a stock price of POT either at 280$ - or 80$/share.