Latest Blog: Fireside Reading - 03/30/2023
-
-
CIO INSIGHTS
-
CIO INSIGHTS
-
BACK TO CIO INSIGHTS
BACK TO ARTICLES & INSIGHTS HOME
-
-
-
-
Investment Insights are written by Angeles' CIO Michael Rosen
Michael has more than 30 years experience as an institutional portfolio manager, investment strategist, trader and academic.
DON'T BLAME NATURE
Published: 05-22-2015Commodity prices rise and fall; no great insight there. Which is why most of us, mostly, take the fluctuations in stride. We (I) may get a little annoyed when the price of gasoline is a few cents higher than last week, and get a little boost of endorphins when it falls a few cents (maybe it’s just me).
Of course, some commodities are more important than others. For me, it’s not oil or gold, wheat or pork bellies. It’s cocoa, whose price has jumped 10% in the past few weeks.
The problem is Ghana, which produces 20% of the world’s cocoa, of particularly high quality, where production is off 20% from last year. Bad weather and insects are being blamed. Mother Nature and mirids (the principal pest of cocoa plants—see below for this fearsome foe of cocoa) may be especially uncooperative this year, but the bureaucrats at Cocobod (Ghana’s governing cocoa board) are the true culprits, failing to provide financing to farmers and delivering fertilizer and pesticide late, right before the rainy season washed both away.
These problems pushed S&P to lower Ghana’s credit rating to B-minus, and the cedi (Ghana’s currency) is in free-fall, off 25% this year (see below).
You may think this attention on cocoa and Ghana undeserved, as there are bigger problems in the world. Fair enough, but in my defense, I see the situation as illustrative of broader themes. Uncertainty is omnipresent in all our lives, as investors or as farmers. It’s (most of the time) not acceptable to blame the weather or insects or market “volatility” on our losses. It’s often poor policies that exacerbate “normal” fluctuations into market disasters. Also, most of us probably give little thought to Ghana, but this small country is part of the global network that infiltrates all of our lives. Lastly, I really like chocolate.
PRINT THIS ARTICLERELATED ARTICLES
-
Not Deflation 02-26-2015
The Consumer Price Index dropped 0.7% in January, bringing the year-over-year change to negative 0.1%. With the ...
READ BLOG POST -
Beach Reading 11-12-2021
I was expecting this to be a Fireside Reading post, but we are having a heat wave in Southern California that is sending ...
READ BLOG POST -
Shock, Part 4 (Divided We Are) 12-21-2016
We began this series with a review of the likely economic policies and their implications of the new Trump ...
READ BLOG POST
-
-
We strive build portfolios of best-in-class investment managers across all asset classes. If you would like to be considered for our portfolios, please contact us using our manager inquiries form.
- MANAGER INQUIRIES
-
SUBSCRIBE TO ANGELES' INSIGHTS
Get the latest investment information and stay on top of market trends.
-
CONTACT US
SANTA MONICA
429 SANTA MONICA BLVD,
SUITE 650
SANTA MONICA, CA 90401
310.393.6300
GET DIRECTIONS -
NEW YORK
375 PARK AVENUE,
SUITE 2209
NEW YORK, NY 10152
212.451.9240
GET DIRECTIONS -
CHICAGO
400 N. MICHIGAN AVE,
SUITE S1700
CHICAGO, IL 60611
312.212.6843
GET DIRECTIONS -
HOUSTON
5151 SAN FELIPE ST,
SUITE 1480
HOUSTON, TX 77056
713.832.3670
GET DIRECTIONS
How Can We Help You?
Institutional InvestorsFully resourced investment office built to manage sophisticated client investment programs
Private WealthPersonalized discretionary portfolio and wealth management services powered by institutional process
Investment ManagementRigorous process and a flexible platform designed to meet client needs
Articles & InsightsLatest insights and perspectives from the Angeles team
Contact UsGet in touch