Jim Rogers calls a next bubble in food again

[cjppjc]

Re: Jim Rodgers calls the next bubble - Food

Should have taken my advise.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

Oh no, this is getting to be quite enjoyable actually. Dissecting a bad debate style has become quite fun.

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

How to debate on iTulip as c1ue:

You are really funny - I looked at the very first link you put up, exactly as I noted in the previous post:

Well, let's take a look at this long list you put up.

The first link: A hedge fund, touting ag land/ag commodities, splashes up a link from "Pioneer" showing how ag demand is inexorable.

and you're saying I'm cherry picking?

Yeah whatever.

I traced through that first link, and discovered that the source of this information is in fact a marketing department. Not just a marketing department, but a marketing department dishonest enough to hide the fact that it is a marketing department.

But then I guess "the marketing department of DuPont's Pioneer hybrid corn seed department" doesn't sound so convincing as "Pioneer Market Economics Group"

Let's then look at this 2nd link in the list. Yes, I'm cherry picking by going in order from beginning to end.

The link in question points to a November 2010 article where the manager of the Allianz RCM Global Agriculture Trends fund, Bryan Agbabian, unsurprisingly touts what his own fund is focusing on.

The article goes on to say:

Since launch, the fund has underperformed the IMA Specialist Sector, but Mr Agbabian says this is not a true indicator of how the fund has done. “The sector is made up of so many different funds. This makes it difficult, and of no real gain, to compare like for like.”

He reveals the fund fell by 40.16 per cent in the first six months of existence, due to “extreme market volatility”, and the fund being held back by “defensive positioning in economically sensitive sectors like fertilisers and agricultural products”.


Since then, he adds, the fund has bounced back by more than 90 per cent, compared to the S&P GSCI Commodity index, which lost 14.58 per cent.

So is this because the underlying trends are not as strong as he (and you) say they are? Or is that because Mr. Agbabian is in fact not very competent?

And how has the Allianz RCM Global Agriculture Trends Fund done since November 2010?

http://www.bloomberg.com/apps/quote?ticker=UQ21:GR


Year to Date -7.71
3-Year 7.43

I don't see any trend here whatsoever, but to be fair, this is a fund. The performance of this fund doesn't necessarily equate to the underlying commodity.

What is the actual information provided by Mr. Agbabian? Zero data - merely the same well worn justifications which I have demolished.

To recap:

1) You provided some information on industry estimates of meat demand growth. This is useful, but I pointed out that these estimates are only slightly ahead of overall worldwide population growth

2) You provided a paper where the headline was that agriculture production would have to increase 1.75% in order to double by 2050.

But the world's population isn't going to double by 2050. In fact that same paper noted that worldwide agricultural yields were improving 1.4% - which is even higher than my belief at the time. This was useful because now you've shown that my understanding of worldwide agricultural yield improvement is perhaps pessimistic - that in fact the improvement in worldwide agricultural yields might be much higher simply due to greater deployment of 1st world technology and capital.

But either way - not in support of your thesis that population growth will inexorably force ag land output prices due to demand exceeding supply.

3) You then put up a list of links, the first of which was a red-handed case of DuPont's hybrid seed corn division astroturfing. While this doesn't mean what is said is necessarily wrong, surely even you can imagine that such underhanded behavior is hardly the sign of truth and reliability

4) The latest installment shows a fund manager talking fast trying to justify why other people should put their money into his fund despite its frankly underwhelming performance - even ignoring the post 2008 global financial crisis volatility.

5) The next link: http://www.irinnews.org/report.aspx?reportid=84983 is really bizarre: all it talks about is the projected world population in 2050 being a 50 percent increase, and agriculture is bad because it contributes to climate change.

Am I debating that population is going to increase?

I have done no such thing.

The article was written in 2009 - using its own data and assumptions (i.e. 50% increase), exp(ln 1.5 / 40) = 1.0102. Or in other words, the 50% population projection arises from a an annual 1.02% worldwide population growth rate from now until 2050.

This is far below existing agriculture yield improvements.

You do know how to use a scientific notation calculator I assume?

Or are you going to debate these very simple calculation as well?

Anyway, I'll look further down the list in the next installment.

So far, ZERO for 5.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

You are really funny - I looked at the very first link you put up, exactly as I noted in the previous post:



and you're saying I'm cherry picking?

Yeah whatever.

I traced through that first link, and discovered that the source of this information is in fact a marketing department. Not just a marketing department, but a marketing department dishonest enough to hide the fact that it is a marketing department.

But then I guess "the marketing department of DuPont's Pioneer hybrid corn seed department" doesn't sound so convincing as "Pioneer Market Economics Group"

Let's then look at this 2nd link in the list. Yes, I'm cherry picking by going in order from beginning to end.

The link in question points to a November 2010 article where the manager of the Allianz RCM Global Agriculture Trends fund, Bryan Agbabian, unsurprisingly touts what his own fund is focusing on.

The article goes on to say:

So is this because the underlying trends are not as strong as he (and you) say they are? Or is that because Mr. Agbabian is in fact not very competent?

And how has the Allianz RCM Global Agriculture Trends Fund done since November 2010?

http://www.bloomberg.com/apps/quote?ticker=UQ21:GR


Year to Date -7.71
3-Year 7.43

I don't see any trend here whatsoever, but to be fair, this is a fund. The performance of this fund doesn't necessarily equate to the underlying commodity.

What is the actual information provided by Mr. Agbabian? Zero data - merely the same well worn justifications which I have demolished.

To recap:

1) You provided some information on industry estimates of meat demand growth. This is useful, but I pointed out that these estimates are only slightly ahead of overall worldwide population growth

2) You provided a paper where the headline was that agriculture production would have to increase 1.75% in order to double by 2050.

But the world's population isn't going to double by 2050. In fact that same paper noted that worldwide agricultural yields were improving 1.4% - which is even higher than my belief at the time. This was useful because now you've shown that my understanding of worldwide agricultural yield improvement is perhaps pessimistic - that in fact the improvement in worldwide agricultural yields might be much higher simply due to greater deployment of 1st world technology and capital.

But either way - not in support of your thesis that population growth will inexorably force ag land output prices due to demand exceeding supply.

3) You then put up a list of links, the first of which was a red-handed case of DuPont's hybrid seed corn division astroturfing. While this doesn't mean what is said is necessarily wrong, surely even you can imagine that such underhanded behavior is hardly the sign of truth and reliability

4) The latest installment shows a fund manager talking fast trying to justify why other people should put their money into his fund despite its frankly underwhelming performance - even ignoring the post 2008 global financial crisis volatility.

5) The next link: http://www.irinnews.org/report.aspx?reportid=84983 is really bizarre: all it talks about is the projected world population in 2050 being a 50 percent increase, and agriculture is bad because it contributes to climate change.

Am I debating that population is going to increase?

I have done no such thing.

The article was written in 2009 - using its own data and assumptions (i.e. 50% increase), exp(ln 1.5 / 40) = 1.0102. Or in other words, the 50% population projection arises from a an annual 1.02% worldwide population growth rate from now until 2050.

This is far below existing agriculture yield improvements.

You do know how to use a scientific notation calculator I assume?

Or are you going to debate these very simple calculation as well?

Anyway, I'll look further down the list in the next installment.

So far, ZERO for 5.

keep spinning, it's fun to watch.

still waiting for you to PROVE ME WRONG, but I don;t think that will ever happen. you'll find something to pick on for every link posted by me, or probably anyone else, to justify your OWN bias against this investment. I better go take some Advil for my coming headache dealing with you. Oh, wait, sorry, they advertise and tell me it's good for me so of course it can't be... they just want to make money.

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

Now this is interesting: when poking around Doom & Gloom's links, I kept seeing references to Jim Rogers/Macquarie China Agriculture Fund

Since Jim Rogers is so prominently displayed here, as is agriculture, I thought I'd look and see just what this flagship fund - plus China! - has done.

But I was stymied: this fund seemed to disappear in 2010.

Bloomberg:

http://www.bloomberg.com/apps/quote?ticker=MCCHAAC:LX

0.000%
NAV: N.A. CHF

Macquarie and Rogers China Agriculture Fund (MCCHAAC:LX)

Objective: Commodity • Asset Class: Commodity • Geographic Focus: China



Liquidated

Wow, can this be right?

Rogers was running all over the world in 2009, there are literally dozens of articles where Jim Rogers talks up agriculture, etc etc...

Registered September 2009:
http://masnet.mas.gov.sg/opera/sdrpr...4?OpenDocument

Officially launched (relaunched?) 2010:
http://www.macquarie.com/uk/about_ma...a/20100201.htm

Macquarie and Rogers™ China Agriculture Fund
The Macquarie and Rogers™ China Agriculture Fund offers investors the opportunity to access the performance of the Macquarie and Rogers™ China Agriculture Index (Bloomberg: MARCAITR Index). The Macquarie and Rogers™ China Agriculture Index is an investable index comprised of agricultural commodities tracked via exchange traded futures on physical commodities. The index is differentiated from other commodity indices by focusing purely on China’s consumption of agricultural commodities. The fund follows a passive investment strategy by tracking the index itself and the exposure to the index is managed by the global Fixed Income, Currencies and Commodities Asset Management team of Macquarie Funds Group.

Yet it seems this fund has been erased from the internet.

The only mention about the end?

http://at.e-fundresearch.com/article.php?aID=15036

RBS (Luxembourg) S.A., 33, rue de Gasperich, L-5826 Hesperange
Macquarie Fund Solutions: Liquidation des Teilfonds Macquarie and Rogers China Agriculture Fund per 1.9.2010.

Must be nice being able to eradicate failures this way.

[Verrocchio]

Re: Jim Rodgers calls the next bubble - Food

Over the last 5 years the value of U.S. farm land has appreciated well over 1 Trillion dollars and the typical farmer has had a little over a one million dollar windfall. It's the biggest boom the world over and we're still subsidising farms to buy votes. The U.S.D.A. survey of Iowa farm sales indicated an acre trading at 1857 in the year 2000. Today the price is just over $7400! The average farmer has seen his income increase from 80,000 a year to almost 340,000 a year.

http://business380.com/2011/03/22/io...7-in-6-months/

You may want to check your facts a little closer. The average for Iowa farmland of $1,857/acre in 2000 is correct, but the price/acre in 2010, the most recent year in which state average price is available, is $6,109. Your article gives an average price in 2011 for E-Ctrl IA of $7,478, but that region is not necessarily representative of the state.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

Now this is interesting: when poking around Doom & Gloom's links, I kept seeing references to Jim Rogers/Macquarie China Agriculture Fund

Since Jim Rogers is so prominently displayed here, as is agriculture, I thought I'd look and see just what this flagship fund - plus China! - has done.

But I was stymied: this fund seemed to disappear in 2010.

Bloomberg:

http://www.bloomberg.com/apps/quote?ticker=MCCHAAC:LX



Wow, can this be right?

Rogers was running all over the world in 2009, there are literally dozens of articles where Jim Rogers talks up agriculture, etc etc...

Registered September 2009:
http://masnet.mas.gov.sg/opera/sdrpr...4?OpenDocument

Officially launched (relaunched?) 2010:
http://www.macquarie.com/uk/about_ma...a/20100201.htm



Yet it seems this fund has been erased from the internet.

The only mention about the end?

http://at.e-fundresearch.com/article.php?aID=15036



Must be nice being able to eradicate failures this way.

WTF does Jim Rogers have to do with ag as a long term investment, other than he promotes it?

you are again SPINNNNNNING away from the core arguement into some other direction. I might even comment on the link you provided, but it does not open.

I can tell you that the RJA, another Rogers fund, i roughly where it was when it started back in late 2007. No one can say as much for the S&P, Dow any the like.



But then, c1ue would NEVER pick some datat point that didn't support his warped analytical style.

You just keep trying though...

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

Over the last 5 years the value of U.S. farm land has appreciated well over 1 Trillion dollars and the typical farmer has had a little over a one million dollar windfall. It's the biggest boom the world over and we're still subsidising farms to buy votes. The U.S.D.A. survey of Iowa farm sales indicated an acre trading at 1857 in the year 2000. Today the price is just over $7400! The average farmer has seen his income increase from 80,000 a year to almost 340,000 a year.

http://business380.com/2011/03/22/io...7-in-6-months/

The article quotes Hertz Farm management. they ar ein the business of managing and selling farms. c1ue would tell your data is not credible because they are in the industry.

EDIT: Btw c1ue, i will be off line a few days starting Monday, but i'll be sure to check back in afterward and see what new spin you find.

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

No one can say as much for the S&P, Dow any the like.

How about gold?

Silver?

How does the ag index you refer to compare vs. random commodities like copper? steel? coal? oil?

By any definition, the ag index has hardly been exceptional in the time period you refer to above.

As for the Rogers and Macquarie China Agriculture Fund - for a fund which is supposed to mirror the RJA, which has Rogers' name on it, and which is run by the same outfit which puts out the index, the closing of the fund is hardly a ringing endorsement and anyone/anything involved.

http://www.macquarie.com/uk/about_ma...a/20100413.htm

Macquarie and Rogers™ China Agriculture Fund
The Macquarie and Rogers™ China Agriculture Fund offers investors the opportunity to access the performance of the Macquarie and Rogers™ China Agriculture Index (Bloomberg: MARCAITR Index). The Macquarie and Rogers™ China Agriculture Index is an investable index comprised of agricultural commodities tracked via exchange traded futures on physical commodities. The index is differentiated from other commodity indices by focusing purely on China’s consumption of agricultural commodities. The fund follows a passive investment strategy by tracking the index itself and the exposure to the index is managed by the global Fixed Income, Currencies and Commodities Asset Management team of Macquarie Funds Group.

I thought China was the big driver of ag output consumption via its switch to meat?

Apparently that meme doesn't actually translate into success for investors in this case.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

I have come to the conclusion you have absolutely NO idea of agriculture whatsoever. You know nothing about the issues in it, you know nothing about the long term challenges, you just basically know not a damn thing. And that is why you grab at straws and try to claim victory over and over.

I don't know anything about this Rogers fun, nor do I care. Maybe they closed because no one was interested. Maybe theindex did not work. Maybe Macquarie did a s**t job of running the thing, or Rogers and them had a fallout. Who knows, and more importantly WHO CARES (besides you).

There is a TREMENDOUS macro-environment in agriculture. Everything from the monsoons in India to the lack of rain Texas this year. There are literally dozens if not hundreds of variables. But somehow this has not found it into your neopyte analysis. You keep looking for the one straw in every article (that works for you while ignoring others), and then continue to hammer home on the sole data point.

Farmland prices have been going up for a DECADE champ. Crop prices have been going up for most of a decade. there is a limit. Soy and wheat will not sell at the price of silver per ounce. Supply/demand will ensure that does not happen. Even marginal land will come into full production to meet that need.

You think everything should mirror gold to be a good investment? I am STILL waiting to hear what percentage of your money went into gold in 2002. Since you never answer, I assume not much if any, but that you have a hard time outright lying to me.

What is it that EJ says about inflation? It is a process, not an event.

Growth in world population is a process, not an event. Peak (cheap) oil is a process, not an event. Changes in ocean currents, sunspots, and the like are a process, not an event. The switch to meat from grains is a process, not an event. And so on.

You are spending all your time looking for events. This is like sayin the recent drop in gold meant the gold bull was over. That would be a ridiculous statement to those of us who understand gold, but it sure works for those who do not.

And thus we come full-circle back to you. You keep looking for events. Ag changes are, and will continue to be a process. And you my friend have no knowledge of any of it. When you change your outlook, and open your mind as you did to investing in metals, and do a little reading of your own, you may then come to understand.

[raja]

Re: Jim Rodgers calls the next bubble - Food

The missing piece here is QEx, and the possibility of both hyper inflation/deflation. As I recall from reading about post WWI Germany, when the Mark went into hyper-inflation, the farmers made out quite well, as land (similar to PMs) maintains its' full value in both old and new "dollars."

In Germany, they had a recovery. I'm guessing, until that happened, farmland was not easy to sell, let alone for a profit.
I'm not expecting a recovery for us in the foreseeable future. Rather, I'm expecting things to get worse and stay that way for decades.

The "new normal" is not going to be what it's been the last 60 years. Everybody's going to get poorer, and there's going to be a lot of belt tightening. Just as Asian shifted from more vegetarian food to more animal food, that trend will reverse worldwide in the future. Just obesity was once rare in Asia, and has increased considerably, that trend will reverse also.
Demand reduction = land price down.

Or maybe not. One of hardest things to predice is the future.

I thought about buying farmland as an investment, but decided against it. If you're not going to use it, you still have pay tax on it, and cut it every year or so to prevent it from reverting to forest. You can hope sometime in the future it will be saleable, but it may not be. Renting land can bring in money, but the land gets depleted, and rents are typically low.

If you have the time and energy to work it, or can afford to pay somebody else to work it, it might make money, as long as what I said three paragraphs above doesn't come to pass. In addition to what I said, there are the things c1ue mentioned on page 1 of this thread about input costs going up due to fossil fuel scarcity. Hard to pass those costs on to a society with 16%+ real unemployment rate . . .

I look around in my neck of the woods and see that there seems to be a lot of land, which might be able to be converted to farmland. If that happened, it would reduce demand.

I'm what you might call a hobby farmer. Retired, and raising a very small number of sheep, goats, cows and chickens for our own food supply. Big garden, fruit/nut trees and berry bushes. When I would go to the Farmers' Co-Op for supplies, I'd feel sort of like a poser amongst these "real" farmers . . . until I learned that there were only two big farmers left in the county. Everybody else was a dabbler like me, and derived their main income from other jobs. I asked, "Why?", and they said, "There ain't no money in farming, unless you go really big."

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

I have come to the conclusion you have absolutely NO idea of agriculture whatsoever. You know nothing about the issues in it, you know nothing about the long term challenges, you just basically know not a damn thing. And that is why you grab at straws and try to claim victory over and over.

I've never pretended to be farmer.

That's why I asked you for your understanding.

However, it is quite clear that your understanding is based on a combination of what seed companies/hedge funds tell you and an unwillingness to accept actually examine the details on the trends you think exist.

I don't need to be a farmer to understand that world population is going up slower than worldwide farm yield.

I don't need to be a farmer to understand that farming is heavily dependent on fuel prices.

I don't need to be a farmer to understand that worldwide currency depreciation has led to all commodities increasing in price.

There may indeed be a trend in ag output prices and/or farmland, but you have done a terrible job in showing that ag output prices are in some way fundamentally different than other commodities.

Upon this shaky foundation you then assert that ag land prices must inexorably go up.

Well, I hope for your sake that this is true.

I don't know anything about this Rogers fun, nor do I care. Maybe they closed because no one was interested. Maybe theindex did not work. Maybe Macquarie did a s**t job of running the thing, or Rogers and them had a fallout. Who knows, and more importantly WHO CARES (besides you).

Given that a Jim Rogers' pronouncement is the basis for this thread, and furthermore that Jim Rogers is in fact a spokesmodel (and I use that term deliberately) for the entire ag output/ag land investment proposition, I do think there is relevance to this information.

There is a TREMENDOUS macro-environment in agriculture. Everything from the monsoons in India to the lack of rain Texas this year. There are literally dozens if not hundreds of variables. But somehow this has not found it into your neopyte analysis. You keep looking for the one straw in every article (that works for you while ignoring others), and then continue to hammer home on the sole data point.

I'm sure that's true.

But you've failed to demonstrate that any of this is in fact exceptional.

A look at this list for example shows weather related catastrophes: famines, floods, droughts, etc etc going backwards from 1900 - nearly 2000 years in which every year sees some type of event: http://www.breadandbutterscience.com/Weather.pdf

Farmland prices have been going up for a DECADE champ. Crop prices have been going up for most of a decade. there is a limit. Soy and wheat will not sell at the price of silver per ounce. Supply/demand will ensure that does not happen. Even marginal land will come into full production to meet that need.

Crop prices going up, as I've noted previously, can be for a number of reasons.

After all, all non-crop commodity prices have also been going up for a decade.

To assert that crop prices are unique - you'd need to show some fundamental difference in behavior which you've failed to do.

Gold, for example, has shown a fundamental difference in behavior. It isn't immune to the commodity cycle, but there is clearly some underlying factor which is being expressed in a divergence between gold price behavior and commodity price behavior.

You think everything should mirror gold to be a good investment? I am STILL waiting to hear what percentage of your money went into gold in 2002. Since you never answer, I assume not much if any, but that you have a hard time outright lying to me.

No, I do not expect everything to mirror gold - for one thing I'm not a gold bug.

I merely use gold as an example because it is traded as a commodity, yet clearly has some differentiating factor which must explain why gold prices are double in 2011 what they were in 2008 - the GFC period being when most commodities went into the tank and sat there for quite some time: not just food/ag output but also oil, metals, etc etc.

You can't say this about ag output prices, or oil prices, or industrial metal prices with the possible exception of silver.

I keep asking you to justify your belief in some quantifiable way, and you keep responding with ad hominem attacks and links which are suspect at best.

The purpose of this discussion was to demonstrate the merit behind ag land as an investment.

From my view, you've not accomplished this goal.

This may be either a function of your inability to communicate or a function of lack of merit, but whatever it is I wish you well.

[Guest]

Re: Jim Rodgers calls the next bubble - Food

If he did indeed say that about Jim it wouldn't be out of the norm for economist types. They will use these people they call "presstitutes" or "self promoters" to associate themselves with and hopefully grab some of their huge "fan base". Some will even become vocal over-the-top critics of these more popular economists in order to become associated with them (e.g. national inflation association and Peter Schiff) . I don't completely buy the Rogers thinking so I don't own any Ag stuff. But he has some useful things to say. And it's unlikely he's calling them up begging to be on their TV and radio shows. Maybe I misinterpret things, but he often seems annoyed to be there and eager to get it over with.

It would gall me too if someone I thought was wrong got more airtime in a month than I'd had in a lifetime. But if people want your insight and you give it to them free, it's hardly prostituting one's self. No more than charging $20 or $30 a month for it would be. One might be speaking in 5 minute appearances to millions free of charge. The other might be communicating on a website less frequently to mere thousands. It would be ironic for a website where its founder's appearances and articles in publications are featured proudly and prominently on the front page to criticise others for doing the same thing, only more frequently and reaching more people. My hunch is that if Bloomberg called up offering a free book and itulip plug for a 4 minute webcam interview, they wouldn't get turned down.

Maybe one is just a superior communicator in those formats.

[raja]

Re: Jim Rodgers calls the next bubble - Food

No, I do not expect everything to mirror gold - for one thing I'm not a gold bug.

You have mentioned in a few posts that you are not a "gold bug" . . . but I'm not sure what you mean by it.

Does it mean someone who thinks the gold standard is going to return? Or simply that gold will be going very high? Would you consider the iTulip position in the gold-bug category?

[Southernguy]

Re: Jim Rodgers calls the next bubble - Food

This thread is very important. Determining:1)If land an food production are becoming scarcer with time, that is relative to world population and 2) if consequently land and food are good investments at todayīs historicaly high prices are significant matters not only to investors but to the whole world population.
So far, he who invested in commodities, be it oil, gold, or ag. has made a fine amount of "non realized" profit.
At some point, as itulipīs thesis says, we shall sell gold.
That is, the disorder in monetary policies held by USA and Eurozone shall be reversed and gold shall stop to appreciate as it has done since 2001.
Time to think "normally" as investors, that is, look for productive investment will arrive.
But, it has never been a bad time to make money by the old fashioned ways of producing something.
So, for people with enough capital and expertise the alternative to just speculating by buying and holding for a long period of time gold and other commodites is always a valid one.
Thatīs different to buying land just for speculative ends, that is buying with the objective to wait for land price increases.
Land is and shall always be a productive investment. An essential one, at that.
Of course there are better and worse times to enter into the business.
And for that matter 2001 was a better time to come into agribusiness, just as it was a better time to buy gold or almost everything else.
But donīt get confused: correctly managed and in in the right economic scale you can always earn a living out of land. Thatīs not the case with speculative investment. Except that, speculating can be a business in itself. And then it becomes just another business: she who does it profficiently gets rich, she who does not is broke.
To ciue and DG: I very much appreciate your insights-information. Just try to keep it objective and donīt try to to attack each other persons. I say it with due humility.