Investing in Agriculture

Unlike the global water shortage, the global food shortage has presented compelling investment opportunities.  Farms, farm equipment makers, seed/fertilizer/herbicide companies are all raking it in.

I have owned Potash (POT) and John Deere (DE) for about a year.  Now that every stock in the sector has doubled it seems so obvious — sure wish I had bought more!  Fortunately, the agriculture sector is in a mega-boom that will last for years.

See today’s Jubak’s Journal for an overview of the reasons for the boom and why it will continue for at least a decade.

2 Responses to Investing in Agriculture

  1. Steven says:

    Wow, good call on this. It is probably safer than investing in commodities futures but the return is almost just as impressive.

  2. Will says:

    Futures aren’t necessarily all that risky. What makes them risky is leverage — if you bought a stock using 90% leverage it would seem extremely risky too.

    I got cleaned out the first time I traded gold futures because of excessive leverage. If I hadn’t used leverage — the equivalent of owning GLD — the price move would have been 15%. Instead, I got a margin call that was greater than the value of my account…. ouch!

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