FSC / Press Release
Commodities Versus Stocks - CRB Total Return Index, S&P 500 Ratio
Calgary, Alberta CANADA, February 04, 2010 /FSC/ - Agcapita Farmland Investment Partnership (AFIP - 0),
The ratio of the Commodity Research Bureau Total Return Index and the S&P 500 is basically the value of a standardized basket of commodities compared to the value of a basket of stocks - in simple terms how much stock you can buy with a fixed amount of commodities. It is noteworthy that:
* The 50-year average for this ratio is around 1.1 times
* During the commodity bull market in the 1970s, the ratio peaked at over 3 times
* The ratio is currently at a 50 year low of around 0.2 times far below the long-term average and just slightly higher than the low reached around 2000. In other words, we are still at a very low relative valuation between "hard assets" vs. "stocks."
* Logically, the ratio of hard assets to stocks should move higher before the commodity bull market is over
* If this occurs, it will be as a result of either stock value falling and/or commodity prices rising - most likely it will be a combination of both as investors rotate out of stocks into commodities as the bull market unfolds
Agcapita is a Calgary based agriculture focused private equity firm which manages RRSP and TFSA eligible farmland investment funds and is part of a family of funds focussing on commodity linked, hard asset investments with over $100 million in assets under management. Agcapita's investment team has over 50 years of investment and finance experience and its field team has over 150 years of direct farming experience.
DISCLAIMER: The opinions, estimates, projections and other information which is contained herein and derived from or attributable to persons other than AGCAPITA is neither endorsed nor adopted by AGCAPITA - it is presented for informational purposes only. Further, the opinions, estimates, projections and other information contained herein are not intended and are not to be construed as an offer to sell, or a solicitation to buy, any securities including those of AGCAPITA and its affiliates, nor shall such opinions, estimates, projections and other information be considered as investment advice or as a recommendation to enter into any transaction. There shall not be any sale of AGCAPITA securities outside of Canada or in any province of Canada in which such offer, solicitation or sale would be unlawful, and any such sale may only be made to prospective investors who meet certain eligibility criteria and who first receive any applicable offering documentation.
AGCAPITA securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "US Securities Act") or the securities laws of any state, and may not be offered, sold or delivered within the United States or to, or for the account or benefit of, US persons (as defined by Regulation S under the US Securities Act). This document is not for distribution on U.S. wire services or dissemination in the United States.
FORWARD-LOOKING INFORMATION: This news release may contain certain information that is forward looking and, by its nature, such forward-looking information is subject to important risks and uncertainties. The words "anticipate", "expect", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward looking information. Those forward-looking statements herein made by AGCAPITA, if any, reflect AGCAPITA's beliefs and assumptions based on information available at the time the statements were made (including, without limitation, that (i) the demand for agricultural commodities will continue to grow at a pace that is unlikely to be matched by growth in agricultural productivity, and (ii) investment demand for tangible assets such as agricultural commodities and farmland will continue to increase for the foreseeable future). Actual results or events may differ from those anticipated or predicted in these forward-looking statements, and the differences may be material. Factors which could cause actual results or events to differ materially from current expectations include, among other things: risks associated with the ownership and operation of farmland, including fluctuations in interest rates, rental rates and vacancy rates; general economic conditions; local real estate markets; supply and demand for farmland; competition for available farmland; weather; crop diseases; the price of grain and other agricultural commodities; changes in legislation and the regulatory environment; and international trade and global political conditions. Readers are cautioned not to place undue reliance on any forward-looking information contained in this news release (if any), which is given as of the date it is expressed herein. AGCAPITA undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.
For further information please contact:
Stephen Johnston - Partner
Agcapita Partners LP
400, 2424 - 4th Street SW
Calgary, Alberta T2S 2T4
Tel: +1.403.218.6506
Fax: +1.403.266.1541
Email: sjohnston@agcapita.com
Web: www.agcapita.com
Source: Agcapita Farmland Investment Partnership - http://www.agcapita.com
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