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Varchild2008 (84.03)

AgFeed Industries Stock is not Commodity Based!



August 04, 2008 – Comments (3) | RELATED TICKERS: FEEDQ


I liquidated out of my Fertilizer after hearing about the commodity implosion.  That's fine.  I took some profit off that stock.

What isn't fine is losing thousands of dollars pretty much across the board in my portfolio.

One stock in question is (FEED).   Since when is an "animal" a commodity?  It's not.
Furthermore, the stock market doesn't price HOGS in China.  Hogs are sold via Auctioning.

Investment communty screwed up on this one.  They totally annihilated anything remotely agricultural regardless.

I am thinking FEED is going to rebound tomorrow when people figure out that when something goes *OINK* it is most definitely NOT a CROP!

3 Comments – Post Your Own

#1) On August 04, 2008 at 6:28 PM, IBleedConcrete (29.90) wrote:

Why did you invest in these stocks if you don't understand what the term "commodity" means?

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#2) On August 04, 2008 at 7:59 PM, StockSpreadsheet (67.93) wrote:

They do sell pork belly futures though, so in that sense pigs, (or at least the meat from them), is a commodity.  Add in rising grain prices hurting the hog farmers, (got to feed those piggies something), and hog farmers are probably getting squeezed right now.  If you see a big drop in pork prices in the supermarket, you will know that a lot of hog farmers are throwing in the towel and slaughtering their herds of pigs.  This would push up the prices of pork in the future as there would be fewer hogs left to slaughter in the future, so supply will contract.

May not be the whole reason, but pork bellys are traded as a future, so probably thought of as a commodity, and there are other factors hurting hog farmers, (grain and oil), so the selloff is not totally unwarranted.

Just my opinion.


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#3) On August 06, 2008 at 1:19 PM, Varchild2008 (84.03) wrote:

The commodity implosion wasn't about Grain Prices (increasing).... It was the exact opposite!!

prices in commodities imploded!  They did not explode!

There's no way FEED should be treated the same as stocks in the commodity sector. 

I do think that the investment community is ignorant. 
I play the stock market based on investor ignorance.

Take (RIMM) Research in Motion.  Even Motley Fool is giving it an Underperform status of 2 stars.

Yet... There's every right to be bullish as heck on RIMM and to invest in RIMM.  So I sold out of (TRA) Fertilizer and threw the cash into RIMM and I am up $10 on the stock right now.  I plan to sell it off tomorrow for my profits.

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