I'm long fertilizer stocks and am just taking a beating. Fundamentally the environment has never been better for their business. (Well, except for the strike at POT). Also whenever the DOW & S&P pop, Ag takes a crap. is that because people are taking their money out of ag to put back into blue chips? Any guesses on what will happen? My opinion is that they wont come roaring back, but long term I don't understand how these companies can't be good to own...
Didnt Yahoo look so good in 2000? The environment for search engines seemed so bright back then. Awwww... what happened?
You see that flag pattern there on ATI? Its that rise on diminishing vol on the right. That is very bearish.
i read it this morning but don't know where,analyst was saying the pullback in chinese economy has reduced there demand for ag products
they are part of the long commodity short financial trade that blew up last month. Im very wary of these stocks and think they are a huge sell.
Texrex, you are right, fundamentally these are solid long term investments. These companies will continue to grow as the demand for their product continues to grow. They are in a long term uptrend for a reason: look at their year-year earnings growth and their projected earnings growth for 2009 and 2010. I predicted a few weeks ago these stocks would test their 200 SMA, which they did and they bounced as would be expected from fundamentally sound companies. As a long term investor, you should be fearful if they breached the 200 and stalled or trended further down. IMHO they will not only retrace their recent pullback but continue to uptrend over the next 2 years. In fact, I am planning to add MOS to my IRA accounts this week. For those comparing this natural pullback in these stocks to the bursting of the tech bubble, consider that the P/E's of the fertilizer stocks are very low for their projected growth, whereas if I'm not mistaken the P/Es of the tech stocks reached unimaginable levels before they finally snapped back to something resembling reality.
Do not make the mistake of letting the P/E sway you. For example, many of the homebuilders and mortgage giants had very lean P/Es all during 2006 and then 2007. Many of these same giants are now trading at a fraction of what they were trading at a few years ago or have gone out of business. The fact of the matter is that POT's pricing spine has been smashed. Its a broken stock. It might return to 2006 pricing at 30 dollars. Sure, the fundamentals seem great to you, but traders know more then you do. They are selling this off because its game over for potash. Go with the facts. The fact is that price is broken, the Olympics are over no more investment, time to sell, time to short. Potash is the next Taser, the next Yahoo, the next SCON where it will continue to wonder down for years to come to shocking levels where you will vomit Potash.
BUY POT when $USD stops its move around 80 or so. POT exports will be worth more when $USD is weaker.
Heres a simple lesson to learn. A very large percentage of quality companies still go down during rough economic times. The economy is a whole and should be viewed as one. Many times companies do not directly affect every single days movements but in the overall big picture almost everything goes down in rough times. One of the problems with mutual funds is that because they have to always have their money invested they may pick solid companies but they will still go down when the whole economy is going down. So my advice to you and every single fundamental investor in the world is to buy when you think the economy is truly turning around or you think it has already turned around. Do you think it has? I doubt it.