I really don't think that one should consider DBA as if it were a stock subject to the psychology of stock market investors. It's tied instead to the movement of prices of four commodities. These commodities, especially wheat, have been very volatile lately, so naturally there are big ups and downs for DBA, especially when they all move in the same direction.
The question is whether one thinks that grains and sugar will cost more dollars in the future. That can be the result of shortages, greater food demand, the decline of the dollar, or all three. Speculation can affect the prices in the short term, but we're talking about substances that are eaten up and not shares of eBay, Yahoo, Google, or Cisco.
I think that for the next two or three years, at least, the price of wheat, corn, soybeans, and sugar will go up. That is why I own DBA. Jumping in and out of the stock itself is not likely to make money.
The lots of DBA that I bought in January of 2007 are up 56%, so a one-day drop of 3-4% just looks like a buying opportunity to me. |
