Kobayashi Maru

As With Fertilizer Commodities, POT Bubbles

All you bubbleheads keep ignoring the fact that POT and all of the
other have CONTRACTS for the rest of the year. The contracts with
Brazil, India and China are DONE. Forward EPS is all but in the bag.
And you can bet that India and China won't make the same mistake
twice with waiting until the last minute to negotiate their deals for
2009. Same price for 2009 at minimum, or slightly more. Either way,
CanPotEx is well in control.

There may very well be a price bubble - I'll even agree with you that
there is. However, the oil "bubble" that we are in, started when
Katrina hit. 5 years ago. Maybe it's taken a little longer for the price
of black gold to rise 100% (anyone remember $60 oil??), but the
thirst needs to be slaked. Similarly, the fields need to be made
fertile.

The housing price bubble that just popped started before the tech bubble - 10 years ago.

The tech bubble came and went in a matter of 4-5 years - 1996-2000, but it lasted that long. Call it a bubble. I agree!!!

A bubble is formed during that period in which demand outstrips
supply and the psychology of buy now or pay more later enters.
Regardless of the market cap (so what!!) of the Ferts right now, the
need (demand) is real. People seem to want to eat. Go figure.

The currently available supply (the rate they are pulling the stuff out
of the ground and putting it on barges) is limited. In the mean time,
POT, MOS, AGU and all of the others will continue to make hay while
the sun is shining for at least the next few years. (I love the few ag
jokes I can inject like that!)

If the bubble pops as new supply comes on line in 3-5 years, I can
live with that. In the mean time, if they can get $1K a tonne, please,
bubble me!

In the mean time bubbleheads, a supply and demand imbalance
exists, prices are rising whether it is right or not, and the pricing power
of these companies for the next 24-48 months favors the sellers, not
the buyers.

People are going to eat. They can reduce their fuel consumption marginally, but choose generally not to at this point.

When gasoline becomes extravagant, folks will STILL ride their bikes
to get food to eat. Food grown with FERTS, by farmers that need to
increase and keep their yield per acre as high as possible.

Be a bubblehead. Just be an informed bubblehead!