Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Agri-Food Stocks Tied to Positive China Economic Trends

Commodities / Agricultural Commodities Sep 07, 2009 - 02:48 PM GMT

By: Ned_W_Schmidt

Commodities

Best Financial Markets Analysis ArticleFor more than a decade investors have been misled. Was the misinformation intentional? Was the misinformation simply due to ineptness? Whatever the cause, the business media, the Street, and many advisors have not served investors well!  This author, like many of you, has listened to countless hours of investment gurus talk. We have all read millions of words written in print about  how to invest, as advised by experts. How many of them told us ten years ago that future returns in the U.S. equity market would be negative? Go ahead, name two. Not two that you read, but two that were presented by the main stream media.


Text Box:

Our first chart this week, above, portrays the ten-year performance of $Gold and the S&P 500. That black line is the total return, including dividends on the S&P 500. Over the last ten years those that  invested in U.S. stocks have lost money. They not only lost the money put into the market, they also lost the dividends received as this is a total return measure. On top of that, some were extracting a fee from the investors for losing them money. We assure you that money can be lost in the market without paying a management fee.

And then we have to hear and read the continuing blather on some bank stock that is up 500% from the low. If one had the misfortune of buying a bank stock on the advice of some investment strategist, that magnificent rise from the low is little comfort. After that 500% rise, the loss on the bank stock is only 91%. That would make me feel better. How about you?

Further, the strategists applauded as hedge fun ran commodity prices up in 2008. Then, we were all told to sell commodities, forever. The Chinese economy was about to disappear, and demand for commodities would never recover. Well, we are still waiting. But, seems the Chinese economy is still in existence. Wealth is still being created in China while in the U.S. wealth may become an endangered species under the wealth confiscation policies of the failing and fading Obama Regime.

As our second chart, below, shows, commodity prices have not exactly followed the expectations of many strategists. Over the more than two and a half years covered by this data, the prices of all of these important Agri-Food commodities have done better than the S&P 500. Even the orphan grain oats, now being served for breakfast at Starbucks, did better.

Text Box:

Eating tends to be a fairly recession resistant habit. Despite the global recession, demand for Agri-Food persisted. Now, the Chinese economy is clearly back to growing. As a consequence, millions more Chinese will join the ranks of the middle class in the years ahead. As that happens, they will consume more Agri-Foods, creating new concerns about the global supply-demand situation in Agri-Food. A new Agri-Food environment is arising, and some will benefit from it.

China and  India will, over the next decade, become net importers of Agri-Food to feed their citizens. How will Agri-Food prices react in such an environment? Concern no longer exists, as it did decades ago, on how China would feed itself. They will simply buy the food in world markets. How will the rest of the world afford to eat as China and India bid up the prices paid for Agri-Foods?

Some have already experienced the benefits and joys of the new world of Agri-Foods. However, we do not hear much about these companies. Have any of you heard or read how many day old broilers YUII produced in the latest quarter? Hear anything about HOGS’s additions to its pork plants? Or, that  CAGE has made a new 52-week recently? No, all we get is drivel on bouncing bank stocks and technology companies of a decade now past.

As our third chart, below, portrays, the Agri-Food stocks, on average, have been doing nicely. Like all groups of stocks, some are up and some are down. Over all, the Agri-Food sector has done better than the market. How many sectors have such a record?

Text Box:

Why has this happened? Agri-Food stocks are tied to the positive economic trends of China. More people have been moved out of poverty in the last decade in China than ever in history. As that has happened, the demand for Agri-Foods has risen.  Movement of Chinese citizens into the middle class in the decade ahead will be measured with nine digits. As that prosperity unfolds, the demand for Agri-Foods will rise further.

Then,  India will arrive on the scene. Presently, the potential of India’s yet to be created economic mass is greater than that of China. The world may be able to feed a prosperous China, but that it can also feed a prosperous India is a real question. It certainly cannot feed both at today’s prices!

The beneficiaries of this situation are all those companies that serve the Agri-Food economic sector. Included are fertilizers, seeds, plant protection systems, agrimachinery technology, animal breeders, etc. Technology plays of tomorrow are not some silly social networking sites, they are the technologies to be delivered by the agrimachinery and seed companies. Now that your Gold investments have worked so well, the time has arrived to get serious about tomorrow. Does your portfolio have an offensive component such as Agri-Food? To begin your research use this link:  http://home.att.net/~nwschmidt/Order_AgriValueRECENT.html

By Ned W Schmidt CFA, CEBS

AGRI-FOOD THOUGHTS is from Ned W. Schmidt,CFA,CEBS, publisher of The Agri-Food Value View , a monthly exploration of the Agri-Food grand cycle being created by China, India, and Eco-energy. To receive the most recent issue of this publication, use this link: http://home.att.net/~nwschmidt/Order_AgriValue.html

Copyright © 2009 Ned W. Schmidt - All Rights Reserved

Ned W Schmidt Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in