Inflation in food commodities and oil/gas will decimate the consumer. This will lead to significant earnings short falls at big retailers, like KSS, JCP, DECK, COH, PG, AVP, CROX, GM, HOG. CROX really looks like shit by the way. fall hard they shall. The credit crisis will spill over into commercial paper and real estate which will add to the fire. Liquidity in the capital markets will dry up, forcing money losing companies to either fold tent or seek unfavorable capital injections. the rich get richer the poor get poorer. LIKE my main man T-Boon Pickens says..Oil stocks will begin to disconnect from the price per barrel and trade lower, as recession expectations dampen forecasts. The same goes for Ag. Despite ridiculous wheat prices,stocks like MON, AG, POT, MOS will fall. I just dont by into the hole solar/wind power just yet. Get short them too. Get short RIMM and find a myriad of upgrades waiting for you later in the day, effectively ripping your face off.
Jeff, I agree with your take on Ag-commodities. It may be a little early yet because "new-crop" is still an unknown and "old-crop" is in short supply. I can't help but think any farmer is going to want to plant "wall to wall" with prices being what they are. What is interesting when prices were low farmers signed-up for the governments conversation program (paid to leave land idle). Now these farmers can not plant crops if they wanted too. Leave it up to the government to fuck things up. What the general public does not understand, profitable farming is most apt to be "farming the government". Living in a primarily AG community, I see it all around me and have witnessed it for years going back to the '50's. In fact, my own family survived on it. It is a way of life and soon became an entitlement.
Can I ask a simple question? Are American dairy farmers subsidized by the government. I was having a conversation with some investor type a while back and said that and he flatly told me I didn't know what I was talking about. So what is it? Are US dairy farmers subsidized or not? On what Boone said about oil stocks. A lot of oil stocks are already cheaper this year than this time last year and look where oil is today. If you ask me the disconnect has already happened. I would go on further to take the position that the market is "wrong" and that money should really be flowing into energy stocks instead of the other way around. After all if the underlying commodity of the company you invest in goes higher while the share price of that company goes lower, then what is the point of investing in the first place if there is no upside to a right bet?
Haven't you realized, this isn't investing in the merits of companies, this is a board game played by adults who just don't want to work for a living ...the harsh reality -- the word earn is the most loaded word in the English language and people can't distinguish it from huckstering.