John Jacob Jingoism Smith

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    • Fri Sep 5th 21:54 PM
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      What's in Store for the Fertilizer Industry?
      Disclosure: I hold POT.

      I think the price of POT has just gone in lockstep with the general trend of commodities (gold, oil, etc) and that is primarily a function of hedge funds dumping commodities and commodity-related stocks in a very big way recently, primarily on dollar strengthening. Many people can't imagine how much money these funds control and how much they influence market prices.

      It's pretty simple. When the dollar weakens the hedgies pile into commodity-related investments to (duh) hedge inflation, driving prices into euphoria-inducing regions and when the dollar strengthens they pile out, causing much fear and uncertainty to us regular Joe investors who hold commodity-related investments and think about things like company performance or commodity fundamentals (which do remain positive, I believe).

      So what we are seeing now with corrected POT and commodity prices should turn around when the dollar resumes it's decline and the hedge funds pile back in again. However, that may take some time. The better part of a year, I believe. Plus or minus. The dollar (and commodities) will trade in a sideways range during this period.

      Patience and faith is required of us long-termers who do not have the inside dope on what the hedge funds or the centrals banks are going to do before they do it.
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