iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,431 Blog Posts

It’s a Commodity, Stupid

Why are you surprised to see Ag stocks getting rolled on? Granted, the reaction is a little harsh, but SQM, MOS, POT, AGU, IPI and CMP have been dead money for more than a year. Haven’t you been looking at the price of corn, or better yet, the general direction of commodities, sans oil?

Following today’s decline, perhaps these stocks are ripe for a bounce. However, the trend is lower because the fundamentals suck. Just know that before you rubber stamp one of your stupid charts.

Just avoid commodities and stick with tech/healthcare.

3-D stocks are getting hit too, off a DDD earnings miss.

COH is sharply lower and we all know why: KORS.

One thing to keep an eye on are the residential construction plays, like MTH, HOV, BZH and LEN. Is this a bump in the road or a warning shot across our mustaches? If housing is heading down, we’re completely doomed. This market will be savagely raped.

MU has been slashed, due to pricing concerns. Although some firms insist this isn’t true, the price action says otherwise. Buyers beware.

Finally, AMBA has dropped to a reasonable price and I might buy it back. “The Fly” is all about finding good prices to buy, then selling them when they get too high.

NOTE: At the moment, I have only two core positions, IMMR and CXO.

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22 comments

  1. Jules

    POT got destroyed considering their entire business revolves around potash prices. The other names are holding up relatively well, given I’m a degenerate gambler I bet on the AGU today. Also, RBCN came like a bat out of hell and my riverboat gamble is paying handsomely. Thanks Fly, looking forward to OA’s member section!

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  2. paul

    Picked up 2015 calls on those commodities. Time will tell how stupid my decision was.

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    • Jules

      AGU was a gift today IMO.

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      • paul

        Jules,
        Did not buy AGU calls but respect I think you will be rewarded.
        1. Unlike POT it has a low payout
        2. Viterra assets yet to be realized
        3. Not cheap enough options.
        Time will tell but think expect another Jana partners group will come in and support your gift.
        Papadop,
        POT – Payout is low enough to provide support and corrections always over react.

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        • Jules

          I bot AGU considering it’s not as dependent on the price of potash as POT. The business is much more versatile and trades at a lower forward earnings multiple.

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          • paul

            Smart reasoning as more money to spend
            I bought POT calls – fall fertilizer application season
            I bought MOS calls for phosphate
            The Fly,
            Enjoy your work but respect Uralkali, the largest shareholder of the Belarusian Potash Company, expects a 7% increase in the consumption of potash fertilizers in 2013

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  3. Papadop

    Higher competition is hurting the price of POT, but isn’t this an overreaction? It may help POT in the long run. I’m nervous they may cut the dividend but I’m tempted to take half a position — thoughts?

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  4. Ray Donovan

    Great foresight on RBCN!! up 9.36% early..if it busts $9 who knows

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  5. BRAVEFLAPS

    Saskatchewan is not for lovers.

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  6. Leech

    Mother Russia !!!!

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  7. TheHarper

    Whats with the PPT on $AMBA, as compared to yesterday stats have completely switched? is that because $AMBA has stayed OS for a few days? just want to understand the PPT a little more.

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  8. Dr. Fly

    Harper

    It’s very unusual for a stock to remain OS for this long, in my experience. However, the stats have been consistent. What has changed?

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    • TheHarper

      Looks like the #s on the gauges have completely changed from yesterday, but I imagine that is because it still OS and that is reflecting the current situation?

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  9. Dr. Fly

    ah, I see, you mean the backtesting data.

    It only picks up the first signal within a 10 day period, in order to get a pure read. The 1 mo time must’ve elapsed too, leaving only 1.

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  10. MOS

    Call me stupid, but I’ve been holding MOS 3 years now, complete under water. Still believing the business in the future of 10 bil people. Any thought?

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  11. 4fl3x

    Speaking of AGU. I don’t check RC’s blog often…but when I do, he’s getting toasted.

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  12. 4fl3x

    Ah. I was going by his blog post “I bot shares of $AGU today as it regained the 50 day MA. My stop is losing $87, looking for the $100 #roll here as Ag heats up.”

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  13. hybullshit

    Is CXO being affected by Egypt crisis ? Would CXO hit $104 due to this ?

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