BMO Financial Group global portfolio strategist Don Coxe discusses Food prices, shortages, and the appropriate investment strategy in the face of the recent food crisis:
courtesy of BNN
Global Portfolio Strategy [04-30-08 10:10 AM]
BNN, April 30, 2008
Coxe is a smart guy and and always worth a read/listen. He’s been on the ag/commodities story since long before it became fashionable.
That said, he’s promoting a new eponymous fund and his comments should be considered with that in mind. He’s clearly talking his book. Not a problem for me, but it’s worth noting.
BR – I’m not sure if you ever read the other big picture. I think Dick Green might be your evil twin..
He has been positive the whole way down. He is really drawing a line in the sand here.
Coxe is spot on as usual. I know he has a new fund to tout but the guy puts his money where his mouth is.
The situation with rough rice is the tell. It is purely a people food grain so no ethanol or critter feed enters the equation. Animal protein for us carnivores is going to get mighty expensive. McDonalds would appreciate your prayers.
Thanks. Food for though .. no pun intended.
I figure Natural Resources will be ripe for another run in a few weeks or so. It looks like it is going down now.
I just don’t trust the old standards at this time. Nor do I want near anything that got a boost from the falling dollar, such as IBM or CAT. Low quality earnings there. I don’t think LCD tvs will be flying off the shelf for a long time until discretionary cash frees up. Ditto retail in general and items typically sold through retail channels such as computers.
On the other hand gold is sinking fast. That’s another one to keep an eye on. Anyone think gold will never shine again (pun intended)?
The theme appears to be necessities as opposed to discretionary. The latter may be on the rise at this moment and the former may be starting to go out of favor temporarily. Thus, necessities may be ready for for a little bottom feeding in a little while.
Any opinions on this? Got any more ideas?
Also, does anyone have an opinion on if a new stock market bubble will arise given the free money floating around now? I still use common sense to think these things through, and sometimes it doesn’t serve me well when markets are involved.
The commodity unwind might be starting. The ETF/grain contract purchasing by investors seeking a new asset class has contributed greatly to the spike in prices IMO. If this is starting to unwind, look out below.
As of 3/1 of this year, commodity index funds control a record 4.51 billion bushels of corn, wheat and soybeans through the Chicago Board of Trade futures, equal to half the amount held in US silos.
That is one big herd mentality brewing.
That’s my thought, too: where will the next bubble pop up? The psychology is still alive and cash is still out there, far too cheap and easy.
Don Coxe is a must read (basic points) and must listen. Whether his calling for bank stocks to implode or commodities to continue their secular rally, there are very few market commentators more informed and understanding of unfolding credit and commodity events than Don. Those who argue against his positions are 99% of the time, plain wrong and reveal themselves as ignorant of these markets.
Don Coxe is the man. Best analyst in Canada. His Ag calls in the last year have been huge.
Also I love how he shows up on BNN (Canadian CNBC) all disheveled wearing a suit that looks like he slept in it the night before, on a cot in the BMO office.
AFAIK, he’s Canadian but works in Chicago.
sorry, best Canadian analyst
on Coxe’s basic points–is there a way to get it without being a BMO client?
What’s with his dig at the so-called “latte liberals?” It had nothing to do with the rest of his comments. Apparently he just felt the need to inject a right-wing smear into an unrelated discussion.
I didn’t know him before, but this really makes me question his judgment and greatly reduces the weight of his words.
Did you know that the United States is a major rice exporter? “Major” as in fourth or fifth largest exporter in the world. Most of the rice is grown in California.
As long as our autarchs are kept under control – an association of bakers got slapped down by a judge when they wanted to limit wheat exports to help their costs – then the U.S. can do what the U.S. does best: grow food to feed the world. Their are great opportunities here to do good and do well.
Hal, because you asked I will divulge a great secret. You can listen to Donald Coxe’s weekly webcast via another great blog:
On the left side as you scroll down, you will see “Jesse’s” DIVERTISSEMENT ÉDUCATIF. Don Coxe is in there. It’s not updated regularly, seems to be a week off. At one time, this was a weekly feature BMO provided FREE on the internet. I don’t know why they took it away, but they did.
I’ve been able to find the Monthly Basic Points via google search. They are not as current as the weekly broadcast but great for the big picture.
There are only a handful of visionaries on this earth and Donald Coxe is one of them. Jeremy Grantham is another. Jim Sinclair is a third. Northern Trust’s Paul Kasriel is a fourth. And, last but not least, Pimco’s El-Erian. (They had to get him back from Harvard because Bill’s gone off the deep end!!!)
After listening to Coxe, i think the best way to make money is to save by becoming vegan, (*evil grin) and invest in Potash and other essential producers.
The scenarios he described are rather scary. And he didn’t even mentioned UG99 stem rust fungus.
I wonder if the powers that be realized how much of a threat this food crisis could become. Just think how easy it would be for all the Al-Qeadas of the world to recruit desperate people that are hungry.
Sun spot activity! Oh great, something else to worry about. Maybe the lack of sun spot activity had something to do with Bear Sterns imploding.
His comments on sunspot activity seems dubious, given that the effect of sunspot activity on global climate in recent studies was not strongly correlated.
Hal. I to noticed the Latte liberals in
the comments. I would not read too much into
this but it did get my attention. I suspect
you have never read his book. The man was
banned from Yank biz station for over a year
for claiming time was right for commodities
and the tek advance was nothing but a bubble. Wall St. did not appreciate it. Mr.
Coxe is IMO the most brilliant statigest
in the US or Canada. JIMO.
Yes and where can I get Stratigic Points
without transfering all my money to BMO?
Moving accounts around is such a pain.
I missed your e. Thanks so much.
When I get a bit of time over the
next couple of days I’ll cheak it out.
Karen thanks for the info regarding broadcast and Basic Points. Missed your e
first time around. Mucho gratitude.