March 15th, 2013

Food Scarcity, Food Stocks and Market Correction

imageA oft-repeated refrain these days concerns the absence of significant inflation reported by the government.  However, those who frequent supermarkets complain about increases in food prices.  A recent page in the Financial Times included the following headlines; it’s enough to turn you into a survivalist, or “prepper”, begin building a bunker and store a food hoard (click on image to enlarge):

Food Prices

And what’s happening to the prices of companies in the food stuffs chain?  Not surprisingly their moving higher (being swept along with the rest of the market?).  We usually think of food stocks as safe havens to run to when the market gets shaky but, this time, there may be some strong fundamental drivers (along with major central bankers around the world flooding the market with their currencies) behind what could turn into dramatic food inflation and higher prices for the sector (click on symbols for charts; parenthesis are yield, volatility and relative strength):

Typically, these stocks have low volatility, offer dividend yields and, with reportedly a worldwide food shortage, may be perfect places to park some money as you sit out a market correction which could come during the “go away in May” seasonal market lull.

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February 15th, 2012

Don’t Let A Stock’s Price Scare You

Traders frequently harbor an aversion to high priced stocks, however, that shouldn’t necessarily be the case.  A perfect example would be a stock that I purchased for my portfolio on January 17 at 189.48.  The stock was TNH (Terra Nitrogen) and I informed members of the trade through an Instant Alert as follows:

TNH produces nitrogen fertilizer products. Although the Group doesn’t appear to be among the top tier, TNH has a 7.55% dividend yield. The stock looks like it may be on the verge of clearing out of an ascending triangle form of congestion and begin moving higher.

TNH was a stock captured in the “Stocks on the Move” Watchlist of January 6.

TNH did break out of the triangle and as of this morning is up to 236.99 for a 25.07% gain in a little over a month.

Fortunately I wasn’t scared off by the stock’s high price.  That high dividend yield is still locked in and looks even better now; the question now is whether to lock in the profit or let it ride?  What say you?

But the way, I’ve added 17 stocks to my portfolio since the beginning of February in an effort to put more risk on the table.  Members were alerted minutes after the trade for my own account is completed.  If you’re interested in seeing what I’m doing for my own account, click on the Membership tab at the top or the Subscribe button below.

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