The Agriculture's Bear Market

Bear markets are commonly defined as a slump of 20 percent or more. Although the Analysts are still bullish on the Agriculture, but the sector is very cautious. There are many reasons why I remain to warn about the Agriculture Bubble Burst; you can still read the reasons at my prior posts - the links in the related posts section.

As shown by The PowerShares DB Agriculture Fund(DBA) Chart below, the sector has been corrected by about 20% from its peak since late June 2008. It means the agriculture stocks are entering into the bear market territory for the sector.

However, currently oversold condition is only a temporary beside a major downward trend of the sector or even it might be the bottom.

I'm not saying the Agriculture is not good for investment. For the short run, the Agriculture sector just needs to be corrected as consequence of bubble that has been due to speculative trading and overblowing up the stock ratings. But in the long run, the Agriculture promises safest and high return on investment. The standpoint is it depends on how you choose your investment strategy.

Here is a list of prices correction of the Fertilizer stocks since its peak on June 2008 until yesterday:

1. Potash Corp.(POT) has downed about 25%
2. Mosaic Co. (MOS) has downed about 30%
3. Monsanto Co. (MON) has downed about 24%
4. Agrium Inc. (AGU) has downed about 25%
5. Bunge Inc. (BG) has downed about 26%
6. CF Industries Holdings Inc. (CF) has downed about 18%

I only list the fertilizer stocks above because the others such as corn producers have slumped before them.





Related Posts :

1. Profit Falls 61% at Archer Daniels Midland(ADM) Signs Agriculture Jitters
2. Forget Oil, the New Bubble Burst is Agriculture
3. Dennis Gartman Predicts Corn Ethanol Producers Bankruptcy
4. Agrium(AGU) is Temporary Oversold
5. More Bearish Alert on Bunge(BG)
6. Bunge (BG)’s Negative Cash Flow and Credit Delinquencies
7. World Food Shortage and the Ethanol Bubble

Please Note!
This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.

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