getting killed in AG

T

texrex2002

In true form, I got in at the top in POT, MOS & BG.

I am the dumb money, I guess....

I guess I understand POT going down, given the strike and all, but people aren't going to stop eating, and dammit, you need fertilizer to grow food (any kind of food, except fish maybe).

wtf?

I am really close to take my lumps and get out (down like 15%), but that usually means the stock is about to bounce...

flip. what to do?
 
FWIW the direction on all three appear to be down on the daily and weekly.

You can always sell and buy back at the same price if they turn around or don't if they keep dropping.

CNBC interviewed a big farmer today and they are planning cutting back on fertilizer intensive crops for next year and planting beans.

Good luck.
 
read the book :reminiscences of a stock operator...its a classic...get it at your library...15% isnt bad...there will be a bounce but how low will it go before the bounce??
 
I think what you are seeing (particularily with the potash/fertilizer stocks) was an almost internet style push to levels that were unsustainable. At the current price of fertilizer, even the high price of commodities is not enough for farmers to make all that much. Farmers will start summerfallowing(farming half or two-thirds the acres which allows you to greatly reduce and in some instances eliminate fertilizer use) or growing crops like peas and alfalfa that actually add nitrogen to the soil. As a farmer myself I have been summerfallowing(half and half) for the last 2 years and haven't used any fertilizer, I grow fewer bushels per acre but have very low expenses and less risk etc. In talking to farmers from Saskatchewan(which is where many of the potash miness are) more and more of them are talking of going back to that style of farming if fertilizer prices stay where they are at.
 
dumb money is buying GE at 26-27 and not having to worry much as it climbs. No work or thought process need, just some time the oak tree grows.

Foolish is chasing the hot stocks trading at high premiums while the bargains are ignored. Too many investors keep chasing the hot ones getting burned in the process.
 
I traded TRA many times. Almost everytime I got in before correction. Hold-on to it, watch everyday and sold around even.

Whether this is another tech-bubble like sector or not, this market is not a bull market, definitely not for ag or many commodity at this moment. So, don't buy at top. Buy at dip, if you are tempted and sell rally to test its resistance. As long as the dollar stay high, oil stay low, commodities like ag / steel / coal can't get closed anywhere closed to those high levels.

Today, oil looks interesting. Many find $113 support. If oil fails the support, commodity may be in trouble. If it succeed, I can see many rebound, fast. And there will be your good opportunity to cut lose when they are overbought. I am looking opportunity to buy some steel and coal names around here. They "can" have a big up side fast from whenever they start rebounding. But those levels that you bought right at top, have a much bigger down side. I see you pain as I still have small positions in JOYG and increasing position in RIO.
 
Quote from texrex2002:
In true form, I got in at the top in POT, MOS & BG.
I am the dumb money, I guess....
I guess I understand POT going down, given the strike and all, but people aren't going to stop eating, and dammit, you need fertilizer to grow food (any kind of food, except fish maybe).
wtf?
I am really close to take my lumps and get out (down like 15%), but that usually means the stock is about to bounce...
flip. what to do?
More...
http://www.elitetrader.com/vb/showthread.php?s=&threadid=38777
 
I think a more appropriate comparison would be to the home builders not internet stock. The home builders were trading at a PE of 6, yet still fell 80%.
You may have a months worth of due diligence in supporting your bull position on POT but remember:
The market can still irrational longer than you can stay solvent.
 
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