Year: 2009

CRB Index Feb 24

Hamilton

In the good old days it was M1, which would be announced on Thursdays  at about 2 pm , that captured the imagination of all market participants. That became M3 because it was supposed to be more accurate or meaningful. Then Doctor Doom from Solomon Bros, or was it Goldman?,who was regarded as the guru du jour by everyone. People would fill up the Westin hotel lobby just to listen to his voice. Then we had capacity utilization combined with a fellow by the name of Lacy Hunt. When that stopped working we moved on to the CRB index. That too has been displaced by supposedly better indexes such as the Jim Rogers and or AIG index. Something about the CRB not containing rice despite the rather obvious fact that half the world population depends on it.  Anyhow, here is the CRB.

CRB Index feb23

I am not sure what the relative weights are of oil, pork-bellies, coffee and or soybeans but superficially we have the answer to the question when commodity stocks are going to stop falling (maybe), and that is when the CRB hits 180. Except if we start getting real deflation!

JP6326 (a.k.a. Kubota)

Hamilton

Kubota is the maker of farm tractors and implements, mostly diesel powered and “small scale”. They are by far the best in their field, so if you are thinking of buying a  Deere, a Cat. or anything powered by Cummings you should  have a peek at how JP6326 has actually done BEFORE you buy into the “runs like a deer” slogan. Here is the chart:

image

Now it does not take a lot to recognize that this might be a “double top”, quite amazing actually considering it took 17 years. Anyway it does not bode well so it behooves one to be doubly on guard before buying John Deere, especially when it is actually made in  Dijon, France or the engine is a Yamaha. Here it is:

de feb23

Now that that does not work it is perhaps a good time to look at Cat after all that is infrastructure if ever there was such a thing or Cummings (CMI). Here is that chart (left) and Cat (right):

cummings

              Cat feb 23

There is a lesson here, rather than doing the same thing three times over and expecting a different result, THINK GLOBAL, or put in a different way, there are very few things under the sun that have not happened sometime before, somewhere. Targets for these stocks are at the lines drawn, for Kubota it is at about 250 Yen. For Cat it is about $15 and DE about the same For full disclosure , I own one, not the stock, the thing itself. I do not have a will but its durability might just induce me to stop procrastinating.

T Telus Feb.23

Hamilton

Costs of communications are inexorable dropping to zero and no doubt this process will continue. Of course some of this is offset by eye-balls, bundling and other gimmicks and or hidden costs but in the end this is a commodity and therefore one has to be very careful owning these for the long run. However within the context of the next year or two Telus looks relatively attractive at these prices. The stock appears to be dropping in a wedge-like formation and this is usually indicative of a turn in the next week or two. Worth keeping an eye on if it gets to about $30.

T feb23