taojaxx

Vale May Bid for Mosaic: Let the Great Potash War Begin

Ryan,

Thanks for responding. My point is this argument about population growth is so general, I view it as useless for our purpose: it assumes similar oligopolistic supply structure and no extra discoveries whereas as we speak current pricing triggers development and Brazil for example announced one such discovery.
As to the link with the real estate bubble, POT from $45 to $226 back to $50 (so multiplied by 5 and subsequently divided by 5.5) seems to me to fit the definition of a bubble.
As you said, best of luck in your investment. After 30 years in this investing business, I have found that the major success factor was precisely that: luck. It oftentimes comes alongside hard work ("the harder I work, the luckier I get"), but not always.


On Jul 18 02:19 PM Ryan Barnes wrote:

> To Taojaxx: Yes, I read all the same reports that you have in the
> past 24 hours. Yes, Vale denied interest in MOS, just like every
> acquirer in the past 20 years has done when faced with a potential
> leak.
>
> And yes, inventories are up at Potash Corp, and Agrium has announced
> price cuts in the range of 20%; this is why share prices have been
> cut in half as I mentioned. As to the broader thesis of global demand
> for protein being higher...if you think that's comparable to real
> estate, that's your right...I just don't see any comparison.
>
> The increased demand for real estate was based on the increased access
> to cheap credit, making ever larger patches of the demograpic quilt
> feel that owning a home was their "right". That part of the fundamental
> equation has changed. The increased demand for proteins in a growing
> population has not changed to date, and I don't see anything stopping
> it.
>
> Best of luck to all in your investing efforts.

Vale May Bid for Mosaic: Let the Great Potash War Begin

In case you don't know, Vale denied they were interested in buying MOS.
Similarly, AGU just cut the listed potash price from $770 to $512 per short ton, and POT announced that North American potash inventories were uo 152000 tons in June, bringing them 115% hgher than the average level of the last 5 years.
As to the world needing proteins, this is the pump argument overused last year to justify ridiculous valuations for fert stocks which were subsequently cut in half, in 3 or in 4 from peak to trough.
Reminds me of the "they don't build real estate anymore" we've been satiated with during the bubble heydays.