Faber

Palm Oil: The Investment Thesis

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It is no secret that crude oil has been falling hard lately, but a less known fact is that another commodity has fallen with it. Palm oil has been hit hard together with the decline in crude oil prices (see chart below created by Correlation Economics). The correlation between palm oil and crude oil is not so apparent before 2007. It was only when the biodiesel and ethanol industry became important after 2007 that we began to see the emergence of this correlation. When you look closely, the palm oil price moves first, while the crude oil price moves several months later. This can be an important tool for investors to predict what’s going to happen with the crude oil price (OIL). But let’s focus on palm oil here.

Read the entire analysis here.

Has agriculture found a bottom?

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The latest interview with Marc Faber (Barron’s) sparked an idea with me. In that interview he said that palm oil was going to do well. The palm oil price is very much correlated with the soybean price and we are seeing a rebound in soybeans at this moment, while palm oil hasn’t seen a rebound yet. As a Belgian, the best way for me to invest in this idea is to buy shares of Sipef (SIP). These profitable companies will pay dividends of 2%-4%, way higher than what you get in European bonds and cash.

http://video-api.wsj.com/api-video/player/iframe.html?guid=F2F49CAB-128C-427B-8E7B-A07B030D1405

Currently, the low crude oil price has dragged the palm oil business down with it. Why you say? It’s all because of the derivatives complex. But we are seeing price reversals in agriculture at this moment. For example, when we look at the overall agriculture commodity index RJA, it is showing a bottom.

Also, potash prices are finally on the rise. We have seen the first uptick move in over more than 3 years and potash companies have seen rebounds as well. So, plenty ideas for your next investment!

Goldbroker.com Interview with Marc Faber

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A new video with Marc Faber to add to the archive.

– Marc holds gold, likes silver, platinum, palladium as currencies.
– Marc expects that the U.S. dollar won’t be strong due to further monetary easing from the Fed.
– Doesn’t expect Swiss gold initiative to move the market.
– Isn’t comfortable in bonds, cash and stocks.

https://youtube.googleapis.com/v/Dp1VjMal6Tc&source=uds

Marc Faber’s Predictions

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Let’s see if Marc Faber’s predictions are coming true on his shorts:
Facebook, Veeva Systems, Netflix, Tesla, Twitter.

Facebook rolling over:

Veeva Systems crashing:

Netflix rolling over:

Testla is holding gains:

 Twitter, the worst stock ever:

I must say, Marc Faber is pretty much spot on on his call.

And remember:

NASDAQ

Oh I forgot one, Bitcoin is also crashing…

Marc Faber: When China Implodes, This Might Be Bullish For Gold

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A very important development is happening today in China.
One after another company in China is defaulting on its debt. Marc Faber quotes: “We have a gigantic credit bubble here in China.” Example: Zhejiang Xingrun Real Estate Co real estate developer defaults. Chinese bank defaults.
What this does to the yuan is obvious, the yuan is declining. If it manages to go above 6.2 USD/CNY, you can expect large problems as the China carry trade will halt and many people invested in Chinese structured products will be in the dumps.
Marc Faber confirms this in the next video. He expects Chinese GDP growth to slow 50% from 8% to 4%. You would think that when the yuan drops, Chinese can’t buy that much gold anymore, but Marc Faber has another view on this. The yuan could drop and as a result Chinese gold demand could actually go up due to people protecting themselves from inflation (and defaults) in China.