I've just returned from the World Money Show in Orlando where more than 10,000 investors gathered to learn about global investing. I had a chance to meet with many of the U.S. and foreign financial experts featured at the show, and over the next week I will share some of their top investment ideas. To view all of the stocks featured in this special global report, click here.
"One of my favorite long-term growth themes is biofuels," says Elliott Gue, who believes this sector is "locked in a longer-term secular bull market." Says the editor of The Energy Strategist, "Among individual stocks in the biofuels sector, investors can look at Monsanto (NYSE:MON), Potash Corp. (NYSE:POT), Mosaic (NYSE:MOS) and Syngenta (NYSE:SYT).
"My basic outlook for all of these stocks is that pullbacks of 10% to 15% are possible from time to time, but I still I regard such selloffs as outstanding buying opportunities. In addition to these selections, I'm adding PowerShares Deutsche Bank Agricultural Fund (AMEX:DBA) to my biofuel coverage.
"The DB Agricultural Fund doesn't hold any stocks at all. This fund instead buys commodity futures contracts, a market where the majority of stock investors have little or no exposure. The fund holds a quarter of its assets in corn futures, a quarter in wheat, a quarter in soybeans, and a final quarter in sugar.
"These are the most-important traded agricultural commodities. Therefore, the fund is a good play on the overall bull market in agricultural commodities I see developing in coming years.
"There are several drivers for the agriculture boom. Two of the most important are rising consumption in emerging markets such as Asia and rising demand for biofuels. To the first point, the simple fact is that as countries grow wealthier, consumers eat more; even more important, consumers eat more meat.
"For example, in China, meat consumption is growing very rapidly. While animal products accounted for barely 5% of daily consumption as recently as 1970, by 2003, meat was already more than 20% of the diet.
"As a rule of thumb, it takes 8 to 10 pounds of grain and feed to produce 1 pound of meat. As meat consumption rises, the effect on grain and feed demand rises at an even faster pace.
"With literally billions of consumers in the emerging markets now starting to demand more processed, meat-based foods, there's an every expanding wall of demand for products like soybeans, corn, and wheat. These same crops are being used to produce biofuels.
"Meanwhile, ethanol production is soaring globally. And with generous government subsidies and technological improvements, production of these fuels will rise regardless of oil and gas prices.
"The powerful wave of demand for food upgrading coupled with rising biofuels consumption is behind the powerful bull market in agricultural commodities. The PowerShares Deutsche Bank Agricultural Fund is a solid overall play on this trend."
Steven Halpern's TheStockAdvisors.com provides a free, daily overview of the latest stock ideas from the nation's leading financial newsletters.
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Reader Comments (Page 1 of 1)
2-16-2007 @ 5:52PM
r.richard fusilier said...
We are about to end the Cycle of "Global Warmth". As soon as the lighter fresh melted glacial water completely covers `and stops the Ocean river of warmth,(The Gulf Stream)the more the ice melts, the faster it melts. We are in for an abrupt LIA and rain patterns and suitable growing climate will be erratic. Vegetation will be scarcer. There, of course, will be droughts and some famine. (Think! why did ythe Norse settle Newsfoundland and then suddenly leave? Answser; An abrupt LIA.) That has caused many a migration in world history. Cold weather does not trigger evaporation thus no rainfall. We are in for it and Cisterns, home wells and proper storage full scale must be planned. Lack of interstructure caused the downfall of the first Holy Roman Empire, for example. We'll need greenhouses and independant water wells and cisterns. The Acadians whose nation was founded because of and in the last LIA and they'll tell you of what knowledge was handed down. In 3 to 5 years, cold will strugglingly overcome this warm cycle because the Gulf Stream will be covered until once again the warm cycle overcomes. Get ready!