Feed The World And Make Money

Since early May, the stock market has been moving sideways and hasn’t really gone up or down despite a few volatile days.  This is giving you an opportunity to adjust your portfolio or at least think about what you want your portfolio to look like if we do get that elusive pullback.  It’s easier said than done, but basically, look at what people need and see if there enough of it.  If there isn’t, you buy it because it’s going higher.  That’s where we are with all kinds of agricultural commodities. 

There continues to be a diminishing supply globally for sugar, soybeans, wheat, cotton, etc.  At the same time, there’s global demand for all of these as more people around the world are eating better, wearing better clothes, drinking more coffee, etc.  Also, some of the fields are being used for development as they industrialize so there aren’t as many places to grow some of the crops.  In addition, some workers are leaving the fields and getting other jobs.  All of that leads to less supply.  Some of these commodities are already up 25% or more but they may have a long way to go.  The Powershares DB Multi-SectorCommodity Trust Agriculture Fund (DBA) gets you long all the various agricultural commodities.  It hasn’t kept up with alot of the commodities simply because it owns a basket and some of the commodities in the basket haven’t moved that much….yet.  I think this ETF hasn’t even begun to move the way it will in the next few months.

In other commodity news, oil continues to move higher (over $60) along with gas prices (up 22 days in a row).  Combine higher gas prices with the rise in ag commodities  and that could really begin to hurt the improvement in the economy in the next few months.  Keep an eye on that.

By the way, watch natural gas.  I locked in some nice profits on natural gas last week but I’m looking for re-entry into UNG as long as it holds the 50-day moving average.

This post published at www.karleggerss.com

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1 Response to “Feed The World And Make Money”

  1. 1 web melayu May 21, 2009 at 3:10 am

    ermm.. nice idea … this is great.. thank you..

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