Market Commentary for the week of July 13, 2009

Typically, our investment approach is oriented not so much around bottom-up stock picking as it is looking at, and evaluating, much longer macro themes and earnings quantification. Today, however, at this juncture where the bear market is seeking equilibrium at the bottom prior to resuming what we hope will be the next bull phase, we find ourselves at an interesting confluence of undervalued equities and long-term demographics. In other words, the playing field is nearly level for all sectors, all regions, all market capitalizations, all themes.

The answer for the search for capital gains begins, therefore, with a hierarchy of societal needs.

Recent declines in sector valuations have caused traders and investors alike to search in unison for investment probabilities that match both short term and long term objectives. By capitalizing upon this unique inflection point, we can build portfolio net worth and redirect the misspent spirit of investing that was destroyed by the latter stages of the last bull phase.

Because of these conditions, my research is pointing at a gathering opportunity in agriculture, food science, and natural resources.

This is not a new play. I have written about these topics for three decades. The usual themes allow us to play market leadership while underweighting the “laggards.” As the globe “shrinks,” due to blended commerce, the internet, and conjoined objectives, the needs of one neighborhood become the business opportunity of another. Traditional borders are being obliterated by common moral imperatives.

These imperatives are creating baskets of investment opportunity in biosciences, gene research, agribusiness and nutrition. In last week’s quarterly I rhetorically asked “Who owns the water?” The tapestry that blends agricultural need with investment entrepreneurship has never been more vibrant.

That is why my work is leading us to countries like Chile, Brazil, Russia, Australia, South Africa, India and China as potential sources for investment ideas.

There is no blame to be laid, simply the idea that the globe’s captive audience has significant social and moral needs to be met.

Now, who has the money and the notion to ante up?