Saturday, April 19, 2008

Rice Panic

I read an article about rice panic, and I checked stocks like MOS and POT, and the new IPO in IPI next week, looks like we'll have a food crisis this year, and DBA is the way to safely invest. So yesterday I added DBA and DAG(double ETN on DBA).
  1. People buy POT and MOS, due to the fact they think there is a food shortage in the world, and it could not be solved anytime soon.
  2. Similarly, when gold started to turn in 2001, gold stocks went up more than gold. Now I think the food price, which started to turn in 2006, still have a long way to go. It's unlikely the bull in food will end anytime soon.
  3. There will have corrections along the way, but it's worth the patience.
  4. I think POT and MOS ran up too fast recently, due to the fact that China agreed to triple the price for potash, the previous hike is 15 months ago.
  5. So if you're aggressive, buy POT and MOS on dip, otherwise, you can safely buy DBA and DAG.
  6. Agriculture is the new game, and the food inflation is the hardest to correct, it's still in early stage.

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