AGRI-FOOD
THOUGHTS
by
Ned
W. Schmidt, CFA, CEBS
Schmidt Management Company
February 20, 2008
Waving a magic wand and making speeches does not prevent reality from creeping into statistics. Per the FRB-Cleveland, the U.S. inflation trend is as shown in the following table.
U.S. Inflation Measures, Year-To-Year % Change
| Measure | Aug | Sep | Oct | Nov | Dec | Jan |
| Core CPI | 2.1 | 2.1 | 2.2 | 2.3 | 2.4 | 2.5 |
| Median CPI | 2.9 | 3.0 | 3.0 | 3.1 | 3.1 | 3.2 |
Gnomes in government statistical offices can remove the direct influence of food and energy from the headline number and arrive at core inflation. However, they can not remove the indirect influence of higher food and energy costs. Those higher and rising prices are coming through indirectly in other prices, such as those of imported Chinese goods. See chart. Food and energy prices rising are causing those prices to rise, and will trickle into the artificial measures created by governments.
Rather than be a complacent victim of rising food prices, investors can turn to Agri-Food investments to protect their wealth. While popular market themes are providing poor returns, Agri-Food stocks have been doing well. This success was recently reported in the Washington Post, which means the world of investors will become informed and gravitate to these stocks. See article at
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/16/AR2008021600203.html
© 2008 Ned W. Schmidt
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AGRI-FOOD THOUGHTS are from Ned W. Schmidt,CFA,CEBS, publisher of Agri-Food Value View, a monthly exploration of the Agri-Food grand cycle being created by China, India, and Eco-energy. To review a recent issue write to agrifoodvalueview@earthlink.net. Ned will be exploring the Agri-Food cycle at The Wealth Expo in NYC, 19-21 October. For information go to www.wealthexpo.net
Please remember that no method is perfect nor is the one
running the model.
All estimated returns are for the model portfolio and
do not reflect those earned on actual portfolios.
