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Agriculture Stocks Wither Away


Global demand theory proves faulty.


Hello from New York, where somebody chewed up my boxing gloves and the entire stock market while I was gone. The fact that my Labrador wouldn't look me in the eye when I cleaned up the Everlast entrails is a pretty good "tell" for what happened to the glove. But Duncan doesn't seem the least bit guilty about what's happening in stocks.

Not even EMC (EMC) is, getting collaterally slammed on VMware's (VMW) 25% smack down. Either Duncan's pulling a canine Verbal Kint on me or he makes a good point when he (mutely) observes that VMware took down guidance and fired the CEO in the same press release: "You're lucky EMC isn't getting beaten even worse, human."

Nothing's going to save you from gappers like VMware. Gaps down mock stop-losses but they're relatively rare. From my perspective, having not watched every tick for the last two weeks, there seem to be some decent long-side shots setting up on assorted pullbacks, if you keep some tight stops. As Rupert Holmes told us long ago, the key on these flings is keeping a casual attitude and a carefully planned escape. Here's what I'm watching as I pen "Married Hedge Fund Manager looking for an oversold Bounce" personal ads:

  • The Ag names are crashing to earth like Britney Spears as "The world is eating more" seems as silly, in retrospect, as "Hit me baby, one more time." I wouldn't get married to them but Agrium (AGU) around here with a stop below $80 and Potash (POT) with a sell order on any close in the 180's are interesting spec ideas. For the long-term, the 10 year chart of Potash is terrifying. For a quick trade? 10% downside if they break or support holds and you make some coin in the late stages of the great Ag Bubble.

  • My love for crude is killing me but the United States Oil Fund ETF (USO) still hasn't broken a rather impressive uptrend. Is T-Boone right about energy alternatives? Yup. And we'll get to windmills eventually. But I'll take the "Over" on the timeframe bet and I like crude while we wait. The USO remains my way to play. Sip here, chug at $105 and barf it up on a close under $100. (I might want to work on that wording for the ad).

  • Speaking of chugging, Anheuser-Busch (BUD) using the Yahoo (YHOO) defense towards InBev (e.g. "We're worth more for vaguely secret reasons") seems misguided, to put it nicely. When your stock has done nothing for the better part of a decade, it takes more than "We don't want to sell" to keep the Belgians at bay.

  • Might I suggest "Shareholders! Shareholders! Shareholders!" as this year's theme for Microsoft (MSFT)? Bill Gates is gone, Steve. Time to announce your presence with authority and, no, waffling on a Yahoo bid doesn't count as either decisive or shareholder-friendly.

  • While I'll confess that I was traveling under circumstances that would have made my mood dark regardless, it remains the case that air travel has become dramatically more expensive and even more dreadful as an experience than it was a year ago. The flights are packed, the staff is redefining "surly" and the bag charges have passengers stuffing anything smaller than a tuba in the overhead bin. If you drew a 50-mile circle around where I'm sitting right this second it would contain every place I plan to go for the next 90 days, at least. That's good news for the Bedford Community Pool; bad news for MGM Casinos (MGM) and the airlines.

  • Hertz (HTZ), don't it?

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No positions in stocks mentioned.

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