Alternative Investments

Re: Commodity-agriculture investments? Help needed...

robertts12 — Tue, 08 Jan 2008 22:54:16 GMT

Dkaiser, thanks for your reply.

I would like funds that invest in a single commodity. Ex: one fund that invest only in cotton, one fund that invest only in soy, one fund that invest only in sugar and so on. But it seems that funds like I want don't exist.

To play in the commodity future market I suppose is too complicated, the brokerages would ask high values (high money)

Re: Commodity-agriculture investments? Help needed...

meyerr — Sun, 06 Jan 2008 13:38:56 GMT

nantucket9:
After reading the posts to my question and doing some research, I think DBA (agriculture; four basic future -wheat, soy, corn....) is the best bet. It has a low correlation, very liquid, and solid record.
Rogers etn is expensive and just out of the box.
MOO is a basket of agriculture oriented companies, but has an r-squared of .60: to me it is not a legitimate uncorrelated asset. It might be a good play, but not when one wants an ucorrelated asset.

Thank you. It helps me tremendously when others share their thought processes and logic behind decisions. When I'm struggling with the same issues it either provides validation or food for thought.

Roberta

Re: Commodity-agriculture investments? Help needed...

nantucket9 — Sat, 05 Jan 2008 21:21:08 GMT

After reading the posts to my question and doing some research, I think DBA (agriculture; four basic future -wheat, soy, corn....) is the best bet. It has a low correlation, very liquid, and solid record.

Rogers etn is expensive and just out of the box.

MOO is a basket of agriculture oriented companies, but has an r-squared of .60: to me it is not a legitimate uncorrelated asset. It might be a good play, but not when one wants an ucorrelated asset.

Re: Commodity-agriculture investments? Help needed...

norbertc — Fri, 28 Dec 2007 22:16:04 GMT

I'm using DBA. Click here. It consists mostly of soybean, wheat, corn, and sugar futures - therefore is a pure commodity investment.

Re: Commodity-agriculture investments? Help needed...

dkaiser — Fri, 28 Dec 2007 21:56:41 GMT

You can purchase these at elementsetn.com.

But....I've been looking at the different commodity ETN's for a while now. I find I get stuck on several points:

Roger's elements funds (actually ETN's) are new and so are very thinly traded. For the agricultural one (the one I'm most interested in) the ETN is not dispersed until 2020 (as I recall). So then you have to hope that the ETN becomes large enough to develop a trading market (unless you have $5M in it in which case they are obligated to redeem your units (shares)).

The prospectus assumes it will qualify for long-term capital gain but that does not seem to be the direction the US IRS is heading.

I think I'm most concerned though that the ETN's of Roger's and others are UNSECURED debt! I'm fine with going long on something and taking a loss; but I'm uncomfortable when I have no guarantee that the financial entity taking my money will be able to pay what is owed to me. Now admittedly one of the larger commodity ETN's (not Roger's) is backed by Barclay's Bank and Roger's Elements products are backed by SEK which the prospectus says is owned by the Swedish State, but still....

I like Roger's views very much. I do believe agricultural commodities are a worthwhile investment for a number of reasons. It's just difficult to find a good vehicle. I go back and forth between something like MOO or RIJA (if it becomes larger and if I learn more about SEK) or buying calls in the commodities market. I have been hoping for some agricultural commodity investment that would qualify for LT capital gains but I don't think I'm going to find one. The longer term calls require an annual mark-to-market but that still is better tax-wise than the current direction the IRS seems to be heading.

Just my thoughts.

Don

Re: Commodity-agriculture investments? Help needed...

robertts12 — Fri, 28 Dec 2007 21:09:59 GMT

IIf I want to invest in a fund of Jim Rogers, what exactly should I do?

Re: Commodity-agriculture investments? Help needed...

oneslip — Fri, 28 Dec 2007 20:02:43 GMT

Try JJA

.75% expense ratio

Re: Commodity-agriculture investments? Help needed...

nantucket9 — Thu, 27 Dec 2007 11:49:49 GMT

Thanks everyone.
FYI: I looked up and did some research on MOO. It is a nice basket of stocks related to commodities; but it has about a .60 (I believe) correlatoin with the general equity market (the dow or something like it; can't recall).
RJA is interesting; and I will look into it, but I heard it was "expensive". I need to investigate.

Re: Commodity-agriculture investments? Help needed...

geezer — Thu, 27 Dec 2007 02:35:48 GMT

There are basically three broad commodities indexes. Dow Jones, Goldman Sachs, and Deutche Bank. All three are available as etfs. The DJ is my preference for it is more evenly balanced across the spectrum of commodities. The GS is dominated two thirds of oil/energy. The DB I looked at and I can not get a good feel for how they came up with their weightings. Jim Rogers, who used to be a partner with George Soros is probably as knowledgable as anyone concerning commodities, and seems to be a man with some real integrity. He has just recently lent his name to an ETN through Barclays that is specific to agriculture only. The ticker is RJA. If you truly want to slice and dice, you might want to look at it.

Re: Commodity-agriculture investments? Help needed...

bythenbrs — Wed, 26 Dec 2007 11:24:02 GMT

MOO is an ETF that figures prominently in the comments of some very capable people over in the Fidelity Forum... I will probably pick this one up when an entry point presents itself in next 30 days or so...

Good luck...

Re: Commodity-agriculture investments? Help needed...

cmcgi — Wed, 26 Dec 2007 05:55:50 GMT

rja

Commodity-agriculture investments? Help needed...

nantucket9 — Tue, 25 Dec 2007 23:04:47 GMT

Can someone help me out?
Looking to put up to 5% in commodities; preferably agriculture-although I would consider energy,metals, ag if not dominated by energy.I know powershares and other ETFs exist.

Has anyone studied this to know best choices for commodity play? Agriculture per se?
Thanks!