Investing in stock market tiddlers can be exciting, but this year could be described politely as "challenging". Investing in the tiddlers in the agribusiness world has been worse.
The emerging companies index is down 10 per cent. That includes multi-million dollar companies that don't fit the Punter's definition of "tiddlers". True tiddlers have collapsed.
Partly for that reason, the Punter has shifted his focus somewhat towards the medium-to-large end of the agribusiness market. Even that has been pretty challenging.
Elders is down 60pc from its 2023 peak and 50pc down in the past 12 months. Since he bought Elders ELD shares seven months ago, he has lost 24pc of his money.
Perhaps that shouldn't be a surprise. Wars in the Ukraine and the Middle East, the soaring cost of energy, rising interest rates, and tensions between China on one side and the US/Australia and the other. Not to mention the collapse of trade talks with the EU and the coming of El Nino.
The Punter has sighed, taken a deep breath, and bought another 400 ELD at $6.10 a pop.
Partly because the price seems to have stopped falling and has even risen slightly over the past month. Partly because even allowing for the forecast reduction in dividend, the shares will yield just under 5pc. That's what you can get for a four-year term deposit with Rabobank, but hopefully, ELD will see some capital growth over that time.
It is already growing by acquisition, with both agricultural research group Eureka! and livestock and real estate agency Charles Stewart joining Elders' fold.
Putting money into Elders is still a lot riskier than money in the bank, mainly because no one knows how severe this El Nino will be or how long it will last. Nor do we know who will replace Elders' CEO Mark Allison.
Fingers crossed.
- The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.
