Just back from vacation, and got your message.
I agree with most of your interpretation, though not necessarily that DE is being "defensive". A lot of bad news has been discounted, and support seems to be growing at the low 30's level. FWIW, the World Bank (if I remember right) just released a report saying they expect long term prices to remain low for farm and commodity goods. Of course, their track record isn't any better than anyone else's.
It's sad to say, but DE stands in better position than others because of its large equipment. My thinking: While the family farmer will continue to disappear in this environment (that's the sad part), the land will continue to be farmed, and bigger farms mean greater reliance on DE's big equipment. As you said, the longer the depressed prices, the bigger the bounceback. Also, the weaker the competitors will be.
One last point, I'm in DE partly for portfolio reasons. I traded out of DTII (the old Detroit Tool) to take DE. I'm an investor, not a trader. I hold a stock for 18 months. That way I get the favorable capital gains treatment. Plus, it makes me take my time in looking at a stock. I'm a patient man.
Best,
JS |
