Hugh Hendry Talks The Geopolitics Of Potash, Grains And Other Scarcities On BBC Newsnight

Tyler Durden's picture

With concerns about surging food prices recently inflamed courtesy of the series of fires in Russia and the halt of grains exports out of the country, several heavy hitters have come out recently to discuss their views. One among them is the man with the best YTD performing macro hedge fund according to Bloomberg, Hugh Hendry, who appeared on BBC's ever-informative Newsnight to discuss potash, food prices, and other scarce resources.

On whether the world is facing a massive food shortage, Hugh's conclusion is that as long as Asia does not have a recession, things are ok, otherwise "in due course there would be great pressure on the food supply." As for Potash, Hendry says that China and Canada "hate each other [in the space]. There has been a profound game of roulette - Chinese consumption of Potash is 35% less than used in Western agriculture. At these prices, the Chinese haven't been consuming in the manner in that they should and they risk an absolute collapse in their yields... China does have a vulnerability in feeding itself which we don't have because we embrace potash at productive levels."

As for geopolitics, the topic arises of what African quid pro quo demands for having the most arable land should be and sending products over to China. The observation is that Africa's bargaining position is negligible (those Goldman offices in Ethiopia, protecting the interests of the locals, are oddly missing).

All this and more in the below clip:

 

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ThreeTrees's picture

I've had your blog bookmarked for a few weeks now.  I'm very interested to see how your calls play out.

Turd Ferguson's picture

Somewhere, behind the scenes, Jeffrey Sachs was cowering in a corner, terrified and weeping.

kridkrid's picture

fetal position... wet pants... wanting it to be over... confused as to why people (co-eds) were not fawning over him.

Clayton Bigsby's picture

find a happy plaaace... find a haappy pllaaaace....

equity_momo's picture

He was on CNBC last week acting pompous as usual but was also claiming he had long been a critic of govn stimulus and how it wouldnt work.  These people are just downright scumbags. I looked upon the "anti-establishment" as crazy radicals who couldnt function in a "normal" society when i was growing up but now im thinking the exact inverse.

Ragnar D's picture

There's a big difference between being the innovator standing up against "consensus" Luddites, and simply trying to cast yourself as "different like everyone else".

 

One of my favorite quotations:

There is a level of cowardice lower than that of the conformist:  the fashionable non-conformist.

-- Ayn Rand

william the bastard's picture

Wheat is good but when the run comes POT will go down with the other Yen funded equities

Oquities's picture

her smart.  him smart too, but`smug.

Missing_Link's picture

you not smart, because you not capitalize properly, and not use proper syntax.

Leo Kolivakis's picture

Apart from the fact that ZH never misses the opportunity to remind us that Hugh's fund is one of the best performing macro funds this year (for disclosure purposes, how much does Mr. Hendry "donate" to ZH?), this is an interesting topic. Lots of hedge funds were long Potash (and now Mosaic). China and Africa are forging long-term strategic alliances, and the politics of food & water are topics that are increasingly important for national security purposes.

lizzy36's picture

Leo, sometimes you are amusing, rarely you enlighten, and every once in a while you come out with a statement worthy of a pure douchebag (with envy issues).

Apart from the fact that ZH never misses the opportunity to remind us that Hugh's fund is one of the best performing macro funds this year (for disclosure purposes, how much does Mr. Hendry "donate" to ZH?),

brendanl's picture

I fail to see the relevance in how much, or whether or not Hendry donates to Zero Hedge.

 

Tyler Durden's picture

You may be surprised that there is no remuneration whatsoever from either Hendry or Ecclectica, as we appreciate pure intellectual vigor and a contrarian view for its own sake (and rely on our readers' generosity to cover our infrastructure costs). The same can not be said for a consistently failing broken record "investment" thesis.

Shylockracy's picture

Ouch, that was a punch in the solar plexus.

BlackBeard's picture

Keyword "Solar" lol.  No pun intended right?

Leo Kolivakis's picture

Solar has been good to me this year, how are your investments?

Tyler Durden's picture

How about showing the performance of all non-cherrypicked solar stocks to date? Here is FSLR YTD, here is STP, here is YGE.

RockyRacoon's picture

Well, he doesn't own those, of course!

BlackBeard's picture

Just fine.  I don't have nearly as much time to get bashed around here as you do.....

Assetman's picture

Ouch.  It's a good thing bruised egos are not external.

bonddude's picture

Bitch slap, cubed.

L.K. seems a tad ungrateful for this forum that he uses

quite a bit. 

Leo Kolivakis's picture

Tyler,

Do what you want, it's your blog, but I find it silly to consistently remind us of how great any hedge fund is. I can list you 30 hedge funds off the top of my head that have long, stellar track records. Who cares??? As for my investment thesis, it's based on what I see the top funds buying, not what the latest scary economic figures are pointing to.

Tyler Durden's picture

From: The Complete Q2 Hedge Fund Holdings Update (In Which We Discover That 181 HFs Hold Apple Stock)

Lastly, in confirmation that hedge funds are for the most part worthless
"groupthink" contraptions which merely ride a leveraged beta wave, and
suck out management fees, Goldman highlights that the "Most
Concentrated" basket of stocks has underperformed the "Least
Concentrated" stocks materially since February 2007, confirming that HFs
have actually destroyed value in both the past 3 years and YTD, by
underperforming the market.

Leo Kolivakis's picture

I do recall stating on many occasions that the majority of hedge funds deliver leveraged beta, so beware paying 2 & 20 for beta. Bridgewater wrote a wonderful research piece on this subject a few years ago. But the key here is to look at what the top funds are buying & selling as an indication of where they are looking for alpha. Since MFFAIS is now charging for their service, I use NASDAQ to look at institutional holdings and get ideas.

Randall Stephens's picture

From a former VP (contact of mine) in a now disintegrated fund-of-funds business that Madoff took care of: "It's only marketing and leverage". That pretty much says it all (she had nothing to do with it, ha!)

Nihilarian's picture

As for my investment thesis, it's based on what I see the top funds buying

That's certainly one way to lose your money.

merehuman's picture

surprised as hell Leo can "see" anything from under those solar dips.

Blinded by the light Leo?

qussl3's picture

So your investment thesis is to buy what the big boys are buying, AFTER they have already bought?

 

Sounds like a winning strategy......

Astute Investor's picture

I declare this as the official end of the Leo the K era on ZH.....

MsCreant's picture

I don't agree with him, but I disagree with your declaration. Censorship sucks. (Besides, I don't think I want to elevate him to having actually had an era).

Astute Investor's picture

I agree that censorship sucks, but much of it has been eliminated due to the Internet.  It certainly exists at the micro-level since every author has a certain bias and rarely presents both sides of the argument.  However, it is extremely difficult to suppress free thought (at least in the West) given the current state of information technology.

Leo will always have Pension Pulse as a vehicle for his missives so no real censorship exists.  I have no problem with the other side of any argument as long as it is cogent, well-researched and fact-based.  ZH is a fantastic forum, but it will only continue to get better by improving the QUALITY of the content.

You raise a fair point about my declaring this the end of an era.  Maybe 15 minutes of fame would have been more appropriate.

 

 

Leo Kolivakis's picture

Astute Investor,

I'd love to know who you really are, but like other cowards you just hide behind your internet pseudonym. I have a lot of enemies out there, and I get a feeling your one of them. Next time you want to take shots at me here, have the decency and the courage to post your real name.

Astute Investor's picture

I have a lot of enemies out there, and I get a feeling your (sic) one of them.

Very Nixonian.  Do you have an "enemies list" Leo?

Trust me, I am not your enemy because you don't mean shit to me.  You shouldn't criticize me or others for punching holes in your specious arguments.  Your comment about having many enemies speaks of your massive insecurity and an obsession to be accepted by others.  Once you realize that you are just another Mr. Irrelevant you will be able to move forward.

Leo Kolivakis's picture

Typo, I have a feeling you're one of them. I don't "mean shit" to you? Feeling is mutual, pal. And if I'm so irrelevant, why am I still allowed to post here and why do my posts generate so many comments? Seems pretty relevant to me.

Astute Investor's picture

And if I'm so irrelevant, why am I still allowed to post here and why do my posts generate so many comments?  Seems pretty relevant to me.

Relevant like "Keeping Up With The Kardashians" for the general public?  If you want to call that relevance so be it.

Hephasteus's picture

Well you're running into relative risk ratios. Like If someone you don't really care that much about tells you your ugly it's not that big of a deal. If someone you deeply love tells you your ugly it's bad. As long as the ponzi system is operating fully opinions and ideas aren't that important. But everyone here knows this is getting raised to the survival level of importance and not just the happiness fullfillment level. I don't like people beating up on leo constantly or taking it to extreme levels. But until the fed and western hedgemony is dead nothings going to make this safe enough to "let it go".

It's like can you be nice when someone is diagreeing with you and it's not that important.

Can you be nice when 12 guys want to rape you.

It's all a contiuum.

MsCreant's picture

You are on the money here. Meanwhile, if 12 guys are trying to rape me, I am already screwed. Principles may go to the wind as I try to figure out how to live through it. 

Nihilarian's picture

And if I'm so irrelevant, why am I still allowed to post here and why do my posts generate so many comments?

Have you heard the term "useful idiot"?

Homeland Security's picture

I junked you - let's see your investment thesis for comparison. Nothing better than a good fight.

taraxias's picture

You must be on the road to recovery. You posted about 100 words without cutting and pasting or mentioning "buy the dips" and chinese solars once.

Keep it up, may be there's still hope for you.

 

EDIT: ditto on Lizzy's douchebag comment

DaveyJones's picture

funny, soo investment advice is not like jazz?

russki standart's picture

Mediocrity doesn't mean average intelligence, it means an average intelligence that resents and envies its betters. 

-Ayn Rand

When you can do better than Hugh Hendry, please feel free to cast stones.

tmosley's picture

Your douchiness overwhelmed your valid points.  Why did you feel the need to accuse ZH of playing favorites to donors?  

DaveyJones's picture

naked attempt to undermine the credibility / objectivity of his ZH critics