Cattle prices are up a ton? why is this stock not up?
Does COW even track cattle? Does not seems to. I don't understand this at all. I bought 100 shares of COW @ $49 in November of 2007. and as of sept 1st, 2011 they are down 41.47%. So my question is if REAL cattle prices are at record highs why does COW not reflect this? Please answer me. thanks
cow is based on futures contracts, so as each contract expires there is some cost involved. the most important thing about cow is the general price directions of beef. if the prices are trending up then cow will do well. starting in 08 with the big delevering cow sold down from 40 to 27, just because in general prices were falling. now prices are rising and cow has moved up from 27 to 33 and now at 31. so it is up about 20% from the low. the item of timing is important if you got in before prices started falling well its been bad. if you got in at the bottome at 27 its been good. so your individual performance really depends on general direction and when you got in. I'm quite satisfied with my investment, of course i'm in at the 27-28 price point. would look for surprising upside move on cow as korea and gipsa deals happen. on top of the drought issue which will result in fewer animals next year as so many were sent to slaughter this year. ie they sold off the breed cows as they could not afford to feed and water them. currently it cost about 150 mo to maintain an amimal-to carry it over till spring would cost 1000 each-ouch, so they sold now in the spring /summer there will be a shortage-looks like