TSXV:AAA.P - Post by User
Post by
englishfrogon Aug 03, 2013 6:34pm
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Post# 21648696
The markets often overreact.....
The markets often overreact.....Anyone who has followed the equity markets for any reasonable length of time knows the pattern.
Boom, bust and echo.
A commodity gets hot, goes higher than can reasonably be suppported by fundamental data, it falls hard then starts to rebound, (with some hiccups along the way) as sanity is restored and then its back to steady rise.
Oil followed the pattern certainly, leading up to 2007/2008 it went on a tear, to around $140 per barrel....spurred by fear of diminishing supply and incresing demand, peak oil became part of the everyday vernacular. It crashed hard, under $40 before getting off the matt and climbing again with a few sharp corrections and today is back over $100...making big winners of those who placed their oil bets after the hard landing.
Potash....it certainly has followed the pattern. Spurred by an increasing world population and the need to increase crop yields Potash got hot and soared in price to around $1k a metric tonne...too high. It fell hard and started to climb again when we got hit by this cartel break-up....
Will those buying now be big winners like investors putting money in oil at $40 per barrel? Time will tell....if so it'll be a marathon and not a sprint, with more hiccups likely along the way.