Archives
Gamma Q July 2021 Market Update
Commentary provided by Todd Delay of Gamma Q Further consolidation occurred in July with range-bound trading for corn and soybeans. Wheat was the leader with deteriorating conditions across many areas, particularly the Northern Plains supporting price. The July WASDE report reduced wheat stocks by nearly 100 million bushels, and we feel further reductions need to […]
Who is Driving the Bus?
Nobody likes paying for insurance. It is intangible as you pay up front for an unknown risk that may or may not materialize. Many of us feel that we overpay, until we really need it. It is perhaps not surprising then that many investors spend little effort protecting against sudden and unexpected drops in the […]
July 2021 Market Letter
Commentary provided by Chad Burlet of Third Street AG Investments Released: August 1st, 2021 We came into July on the heels of a huge price rally caused by the USDA’s June 30th acreage report. Their estimates for corn and soybean plantings were both more than a million acres below the average of the analysts’ estimates. Those rallies […]
Call me a Pessimist
All investors know the adage to “buy high and sell low” but few adhere to it. We can see this with record volume to start July trading coming mostly from retail investors as the S&P reaches another all time high. Perhaps I have been in the futures industry too long because when things are “too […]
June 2021 Market Letter
Commentary provided by Chad Burlet of Third Street AG Investments Released: Wednesday, June 30, 2021 In our May Market Letter we wrote about the exceptional volatility in the agricultural futures markets. June showed us that May was just a warmup. In May corn had seen a 3.5% break and a 3.9% rally in a very short time […]
Hedging an equity portfolio: Volatility
In our last article, “Why Traditional Hedges Fail,” we opined that most traditional hedges had significant weaknesses and did not have many characteristics of a great hedge. Volatility (long positions in VIX futures), while not perfect, has a number of these favorable characteristics for hedging an equity portfolio. The characteristics of an excellent equity hedge […]
A Better SPY?
Index investing is all the rage now, with over a trillion dollars invested in the SPY and VOO ETFs alone. Low fees coupled with broad market exposure are expected to be better for your portfolio than an actively managed strategy with higher fees. One could argue that as the indices’ components attract more capital flow, […]
When Good News is Bad
My favorite analogy for passive investing describes two men sitting at a bar. One is drunk and the other sober. When the night is over the sober man leads the other home to make sure he gets there safely. Historically, hedge funds and active investors pored over financials, looked at P/E ratios, and listened to […]
April 2021 Market Letter
Commentary provided by Chad Burlet of Third Street AG Investments April had the largest one month rally of corn futures ever. Considering the 162 year history of corn futures, that is no small milestone. May Corn futures rallied $1.75¾ (31.1%) this month. In the process the front month soybean/corn ratio moved from 2.55 to 2.12 and May […]
Inflation Coming?
Want to play a “fun” game? Go to Google and type “currency crisis (insert any country name)” and see your results. Luckily for Americans, you will find that the United States is one of the few countries that have avoided this designation so far. As one of my Polish friends who immigrated asked me, “Why […]
Q1 Agricultural Market Commentary
Guest post by Malinda Goldsmith of Four Seasons Commodities Agricultural markets have completed monstrous seven-year bear moves for good reason. Consider that we’ve had four years in a row of record or near-record crops, generally benign growing seasons in North America, ever-larger crops in South America, a strong dollar and a trade war which focused […]
Why Traditional Hedges Fail
An article by Scot Billington, Covenant Capital Management Unfortunately, most traditional hedges fail to deliver in several key areas. Buy-and-hold investing has been wildly successful since 1982; however, its adherents have had to endure two 50% drawdowns, a 25% down day, and 14 years of zero return. Long-term wealth is significantly impacted by drawdowns of […]
Futures Contracts are Easy. You are Already Using Them.
I have spent over a decade in the futures industry, so I am accustomed to blank stares when I tell people what I do. Most immediately assume it is too complicated to even try to understand. The ironic thing is that we all intuitively understand them already. We trade them all the time. We can […]