Nsomniyak Challenge
Economic growth in the US has been based upon asset inflation since 90’s - first stocks and then housing. I don’t see any large asset class left to inflate, and as housing deflates, I think we are looking at anemic economic growth for at least 2 to 3 years - Western Europe is no different. Rest of the world has been growing steadily in the same time period, but its growth will decline as US growth stays stagnant due to: US constitutes about 30% of global GDP and 2/3rd of its GDP is consumer based. In other words, 20% of global GDP is based upon US consumer. Also, in the last 3 years, there has been a rapid increase in the growth of consumer credit extension in the rest of the world. IMO, consumer credit defaults in some parts of the rest of the world will also add to gradual slowdown in those economies.
People will have to eat and fertilizers will stay hot due to a) steadily increasing middle class in the rest of the world, b) acceptance of GMO seeds across Europe, c) seeds that require little water to grow require more fertilizer, and d) significant barriers to entry to immediately increase production. I don’t know how POT, MOS, CF, and AGU will fare in the contest timeframe as they have already gone up quite a bit, I picked them because these are four of my top 10 holdings.
I also own (and picked) RIG due to its earnings visibility for the next 4 years. I realize its stock price can be adversely affected should oil price goes down, but at least I know it is attractively priced and will feel comfortable holding in those times.
FTK is my last pick. It has been discussed extensively on the board, I own it and picked it due to a) excellent management, b) significant growth potential due to its products and predominantly NG E&P clientele.
