It’s the next big

  • Published on

  • View

  • Download

Embed Size (px)


<ol><li> 1. Its the Next Bigand Highly ProfitableThingIf you believe in the commodity price cycle like I do, its a good bet that youalready own some assets related to the oil and gas industry, and perhaps somegold. The current commodity price cycle started with oil, then moved to gold andother precious metals, and has now entered its final phase in agriculture. Themigration is already taking place, and its not just a weather-related event. There isreal demand out there and real scarcity. Agriculture as an industry sector is aboutto experience a major resurgence.To be very candid, probably the best way to profit the most from the commodityprice cycles migration into agriculture is to own farmland. The price for goodfarmland is going up all over the world, and its going up significantly. Of course,not every investor can just go out and purchase 1,000 acres of really goodfarmland, so you have to consider agriculture stocks and other related securities tohave exposure to the sector.There are lots of individual stocks related to agriculture and many have alreadydone well due to the migration in the commodity price cycle. One great way to playthe sector is by using an agriculture exchange-traded fund (ETF), and one that is areal standout is the Market Vectors Agribusiness ETF (NYSEArca/MOO), which hassome $6.0 billion in total assets. The funds stock chart is below: </li><li> 2. Chart courtesy of www.StockCharts.comThis ETF owns many of the big names in agriculture, like Monsanto Company(NYSE/MON), Deere &amp; Company (NYSE/DE), and Agrium Inc. (NYSE/AGU), to namejust a couple. A lot of these stocks have been doing very well lately. This fund isgoing to move with the commodity price cycles rotation to agriculture.Now, any way you slice it, any kind of investment related to commodities shouldalmost always be considered risky. And the reason for that is the inherent volatilityand unpredictability of commodity prices. That being said, I believe that the finalleg of the current commodity price cycle is now moving into agriculture, and thistrend is supported by supply and demand, scarcity of good land, global warming,and general price inflation. Its a trend that I believe most equity investors shouldhave some exposure to.The great thing about agriculture is that when farmers do well, local communitiesdo well. Even large, corporate cash croppers are local businesses, and any profitthey make goes right back into the communities they operate in. When a farmerdoes well, the local community does well.The commodity price cycle is currently providing a major consolidation in oil prices,as well as gold and silver. These commodities have already done tremendously wellin recent years and will likely reaccelerate commensurately with the globaleconomy.However, if I could pick one new trend that has excellent profits potential goingforward, it would be the commodity price cycles migration into agriculture. Thenext profession thats going to do well financially is farming, and its about time.</li></ol>