I will edit this post later when I have more time but just want to quickly mention, following yesterday's thoughts on replacing Powershares DB Agriculture (DBA) with another instrument [Corn Rocks but We've been Frozen Out]; I've decided to go with what is essentially an Ultra long in the agriculture commodities - Powershares DB Agriculture Double Long (DAG). This is essentially the same index as DBA, but twice the return. (either up or down)
Since I will have a lot more volatility with this investment vehicle since it will exaggerate the moves of DBA by a factor of two, I have not bought as much of it since I get the same movement for half the exposure. [Apr 17: Four New Agriculture ETNs]
So I completely sold my 3.2% stake in DBA and am replacing it with a about 60% the exposure in DAG (about a 1.8% stake). I'd like to buy more on dips since its had a huge run of late, but we'll see how deep the dips are.
Folks, everyone is talking about crude oil - I do believe demand destruction from the developed countries and eventually developing countries as they cut back subsidies will help alleviate that into the 2nd half of 2008. A slowing globe will also do the trick. I do however now believe the food crisis which a few of us have been talking about for many many months, will be the story of the 2nd half of the year - recent weather in the Midwest took a very bad situation and took it to critical. I don't think Wall Street understands that yet. So replace "food" with "oil" and keep the same hysteria you are hearing everyday on TV and in the news going for another year. And realize people can demand destruct energy much easier than food.
I'll write more on this subject later but if you are new to the blog, just click on food crisis tag below and you'll see months of history on the subject. There is also a story in the Wall Street Journal today and as we all know, until the Wall Street Journal puts information in front of the traders they are usually oblivious to it. So I think awareness of this subject will be skyrocketing by later summer/early fall.
Last, stock up your freezer with what you can... as I've been saying for many months. You'll be paying a lot more in the future for everything. Even though there is little inflation in the United States (source: government)
Long Powershares DB Agriculture Double Long ETN in fund and personal account
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