Fertilizer stocks out of favor

Quote from GGSAE:

There are different valuations for sure; i find POT and MOS to be the most overvalued compared to AGU and CF. I find in this type of market the smart money likes the commodity-related stocks with the highest earnings and biggest market caps, hence these companies have the most 'oversold' conditions of the sector. I still have a long tendency on this sector as each company in the sector continues to blast through expectations during earnings season...now that doesn't mean that i think it's an indefinite trend upward, nor do I believe the supply prices of Potash will continue to shoot up from demands of China et all. And even though all my money is made from trading these in pairs (e.g. being completely dollar hedged), you still have to respect the bullishness of the sector...god i remember trading AGU and MOS when they were in their 20s!
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GG, I started trading in Feb and heard about the hot ag sector. I looked at the stocks and thought "They've run up way too high and they're way too expensive." Missed the 50% following run.
 
Quote from S2007S:

Crude oil down 16% in only 2 weeks. Still has plenty of room to fall. Did I not say the only catalyst for this market is lower oil prices. Oil and commodities are in bubble land. You can include all AG stocks in bubble land as well.
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S2007S, what is your supporting argument that commodities are in a bubble? Simply saying that they are doesn't explain a thing.

It is certainly true that these AG stock started to slant upward in mid-August when the equities shit hit the fan, so part of the bullishness of this sector has nothing to do with earnings. It is very improbable that potash earning went through the roof just when the crisis hit in mid-August. The is in other words a frenzy going on.

These stocks are therefore overvalued... the question is by how much?

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Quote from NoDoji:

I think CF, MOS and POT correlate with each other because they are ALL fundamentally sound and keep reporting triple play earnings quarter after quarter. CF has the lowest P/E by far and is a bit less volatile.
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This still does not explain why they are correlated. Even if all of their earnings are going through the roof, they would still be different and if there were a direct correlation between earnings and stock prices, each stock would look a bit different (but all would still be going long).
 
I'm surprised how much interest there is in trading pot these days. I have been trading this thing for the past 4 years when it had volume under 1 million a day and everyone here thought i was crazy. Indeed pot is a monster. But like someone said, it's an atm. Only if you can understand how it trades. Otherwise, it become a black hole for your capital. And whether its in bubble land or not has nothing to do with intra-day trading.
 
Quote from Scalper007:

I'm surprised how much interest there is in trading pot these days. I have been trading this thing for the past 4 years when it had volume under 1 million a day and everyone here thought i was crazy. Indeed pot is a monster. But like someone said, it's an atm. Only if you can understand how it trades. Otherwise, it become a black hole for your capital. And whether its in bubble land or not has nothing to do with intra-day trading.
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I watched POT's charts for three months before I decided to trade it. The patience paid off because by the time I traded it, it had experienced several pullbacks and rallies to new highs, and had hit its 52-week high. By that point I had a good instinct for traders' reactions to its various support and resistance levels. What's nice about POT and CF is the high stock prices allow for large price moves in a short time if you catch the waves at the right point. As a fairly inexperienced trader, I'm ultra conservative and set my stops close to break even immediately. If the trade doesn't go my way, I obviously haven't caught the wave, and I'm out.
 
Quote from makloda:

And how much money did you make capitalizing on trading against these 'obvious bubbles'? Zero? Or below zero as in averaging into losing positions?

P.s. Please spare us the posts on how you're making money 'trading around' your losing positions. Few here are stupid enough to believe your BS.
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Look up the prices of

SMN
DUG
DEE
and DTO from the end of June until now.

Adding into DUG and SMN along the way down paid off. Im now out of both positions completely at the moment. Now im playing the long side for a bounce in commodities at the moment with small amounts of DIG, UYM, DXO and DAG.

S2007S


Registered: Aug 2006
Posts: 6929


06-27-08 11:10 AM

Quote from makloda:

So what are you shorting right now anticipating this insane crash?




Actually I still own QID, SMN, DUG, DEE and DTO.

I believe oil and commodities are ready to correct greatly which could give equities at least a 5% boost.

I actually have been adding some longs, added DDM, QLD and more UYG over the last day.

Im still bearish, but Im anticipating a bounce back to 11800-12,000, that catalyst will be drop in oil from 140 to around 120-125 a barrel. Now if oil surges ahead and the dollar drops I think sub 11k levels could be here by next week, also keep in mind the VIX is not even close to march highs which makes me think more selling is coming.
 
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