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Rick Rule on Commodities: Be Prudent, Study Hard, and Take Advantage of Volatility
Source: The Gold Report
Investor Rick Rule, founder of Global Resource Investments, is legendary in the mining, energy, and exploration business. In this edited transcript from a presentation (10/10/08) for clients, Rule shares his thoughts on the current situation. Rick founded GRI in the late 1970s, in middle of a commodities price boom, and led it though the subsequent recession of the early 1980s and all the economic ups and downs since then. The excerpt below, edited for length and clarity, focuses on his outlook for commodities.
. . . I expect the outlook for commodities to be good relative to other…
7Nov2008 | The Gold Report | 1 comment | ContinuedGood News for Some Long-Term Potash Investors
By Andrew Mickey, Q1 Publishing
It’s been a wild year for fertilizer stocks. Many investors who have been loading up on agriculture stocks right along with the hedge and mutual funds have taken some big lumps over the past couple of months, but it looks like the panic selling period is behind us.
When overleveraged traders and hedge funds are forced to sell anything and everything, we’re all forced to relearn that fundamentals mean next to nothing in a bear market. But that could be slowly starting to change right now. And if it does, the long-term outlook for fertilizer and potash…
Tight Credit for Farmers Leads to Smaller Crops, Higher Prices and More Hunger
Tighter credit for farmers could worsen a global food crisis as smaller crop sizes cause prices to soar.
Many farmers have traditionally bought pre-season supplies such as seeds and fertilizer on credit and then paid off the debt with the proceeds from the year’s harvest. But with a growing number of farmers unable to obtain the credit they need, crop yields will suffer.
Global wheat production will likely be 4.4% less next year, Dan Basse, president of AgResource Co. in Chicago, told Bloomberg News. Basse believes the world’s corn and soybean crops will also see declines.
“The credit situation is worrying even…
28Oct2008 | Money Morning | Comments Off | ContinuedInvesting in Commodities
Most of us Americans are so accustomed to a world of plenty; we have a hard time imagining a world of scarcity — much less making investments based upon this idea. But the energy markets provide a very powerful example of what happens when resources become less plentiful.
Five years ago, almost no one believed that oil prices would soar past $30 per barrel. $50 seemed utterly unthinkable. As oil prices continued climbing, so did disbelief. The skeptics never abandoned their misguided notion that oil was “overpriced.†So when crude retreated from $75 to $50 early last year, the prospect of…
23Jun2008 | The Penny Sleuth | Comments Off | ContinuedBACK TO BASICS
I have been buying natural resources since 2001. Back then, commodity prices were the cheapest ever in the history of capitalism and tangibles were not on the radar screen of many investors (they still are not). Fast forward to early 2008, where prices of resources are heading to the heavens, money is starting to pour into the sector and investors are beginning to take notice of the boom. So, where do we go from here? It is my observation that the current bull-market is still in its early days and fundamentals indicate that we have a long way to go.…
20Jun2008 | Daily Reckoning | Comments Off | ContinuedU.N. Calls for Increased Cooperation to Fight Growing Global Food Crisis
The United Nations announced yesterday (Wednesday) that an additional $20 billion would be needed each year to combat global hunger.
On the second day of a three-day summit hosted by the U.N.’s Food and Agriculture Organization in Rome, leaders from 40 nations and representatives from 183 countries met to address the growing world food shortage.
“We must focus on the underlying causes: years of neglect of the agricultural sector and the lack of investment in increasing productivity,†U.N. President Ban Ki-Moon told reporters, Bloomberg News reported. “The price of oil has contributed significantly in the price rise of food. There is no doubt…
4Jun2008 | Money Morning | Comments Off | ContinuedAgriculture Supercycle Fertilizes Investor Profits
In a choppy market swirling with negative energy, wouldn’t it be nice to own a resource stock that keeps rising in the face of ALL bad news?
Welcome to the “agriculture super cycle†and the wild and whacky world of fertilizer.
To give you an idea how bullish the fertilizer industry is – since Jan 1, 2008 – while the S&P TSX composite index has decreased 4%, major fertilizer companies like Agrium [TSX:AGU], Mosaic [NYSE:MOS], Potash Corp [TSX:POT] and Kennecott [NYSE:RTP] have gained an average of 21%.
What are the fundamentals that go into creating this so called “super cycle�
Potash and phosphate fertilizer are mined…
14Mar2008 | Guy Bennett | Comments Off | Continued
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