Early Retirement Asks – Got Enough Bread?

September 23, 2010 by Jeremiah | 0 comments

I think it was around 2001 that I received some literature and a sales letter in the mail from Ken Roberts and the US Chart Company. He was promoting TWMPMM which stood for The World’s Most Powerful Money Manual.

I wish I could remember what I paid for the course, but I can’t. I did find the course and the information it taught to be valuable, if only to realize that there was more than one way to skin a cat.

The course was a primer on the commodity and options market and how to trade these instruments. This world was totally foreign to me and having a couse like this was beneficial just by learning what was available and how the market worked.

I think Ken Roberts got out of the business in May of 2006. While there has been a lot written about Ken Roberts – both pro and con – I found him to be a good teacher and enjoyed the course he taught very much.

I mention all of this so you can understand that you need to be well rounded in your investment view of the world. the world is a much smaller place than it was just a few years ago and you need to be familiar with stocks, bonds, options, futures, FOREX, and commodites.

Along these lines, I read an interesting article the other day about wheat. About a month ago, a young Egyptian man was killed when a fight broke out in Egypt. He was waiting outside of a bakery for bread. Killed waiting for bread. Egypt is a large importer of wheat and it gets about 50% of its supply from Russia.

Russia recently announced that it has halted all exports of what for the time being – possibly until the spring of next year. No doubt you have seen the news about the fires in Russia. These fires burned some of the wheat crop and was one reason for the ban on exports.

Maybe you have read about the flooded in Pakistan? Pakistan is the third largest exporter of wheat. The wheat crop was destroyed along with everything else.

So you can see where I’m going. wheat is going to be in short supply for the world’s poor in the near future. This means the price of wheat is going to go up. You could get smart about commodites if you could get your hands on a good commodites course.

Or you could buy an ETN. An ETN is like an ETF if you know what that is. It is like a mutual fund that is traded like a stock and it buys certain commodites. Take iPath Dow Jones-UBS Grains Subindex Total Return ETN (JJG) for instance. This ETN only buys soybeans, corn and wheat.

So if you thought wheat might be going up in the next six months or so, you could buy JJG to take advantage of this price increase. Symbol RJA for Elements Rogers International Commodity Agriculture, is another. However this ETN invests in a broader mix of 21 different holding. Wheat makes up 17% of the portfolio.

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For Taking Early Retirement (TER), I hope you are enjoying a great retirement or are close to that day!