02-28-2014, 07:01 PM
Eric, I noticed that when I was first looking at DE. There was a freeze in the early 00's also.
I was "guestimating" at the time that earning would drop 50-60% and the div would be frozen for a couple years if the farm economy went into a tailspin. At that magnitude, the div would still be covered but it wouldn't be pretty. Also have to take into account that with the advances in the emerging markets, China & India specifically, the demand for higher quantity/quality food that agribusiness can produce will limit the downside. That's just a guess on my part. I do know the Chinese market has really screwed up pricing when trying to buy Bordeaux "en primeur" so why not food?!?
I was "guestimating" at the time that earning would drop 50-60% and the div would be frozen for a couple years if the farm economy went into a tailspin. At that magnitude, the div would still be covered but it wouldn't be pretty. Also have to take into account that with the advances in the emerging markets, China & India specifically, the demand for higher quantity/quality food that agribusiness can produce will limit the downside. That's just a guess on my part. I do know the Chinese market has really screwed up pricing when trying to buy Bordeaux "en primeur" so why not food?!?
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan