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Better than gold?

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Today the market is in another downturn. Downturns have been pretty regular lately, and they are not usually just a little down, but more than 100 points down. Sure, there have been bigger drops than that before, but it is the frequency of these downturns that is now the concern. Since the beginning of this year, both the Dow and S&P are in negative territory, or at best, struggling to break even.

That leaves an investor with few options. Staying in cash is certainly a decent option, as at least you may not be losing money, like much of the market is right now. Buying into gold is somewhat of a hedge, and may keep up with the major indexes, or beat them slightly. With the fed pouring money into the economy, the value of the dollar will drop, and inflation will go up, even if only slightly.

But, is there anything better than gold? Well, one could argue, platinum right now, as it has seen prices rising at a rapid rate lately. But, that is pretty much another precious mineral too.

Today, I think there may be something even better, and it is a stock that meets all of the demands of "I Eat Bear". The stock is (TNH) Terra Nitrogen. Yes, in this case, I think nitrogen, may be the base product to beat gold, especially for this stock.

Why?. Well, as a chart fan, the trend has been only upwards in the last year. But, in this case I think there is a far better reason. The dividend. TNH is paying a dividend of 14+%. Hummm?
As long as the stock price does not drop significantly, there is a good chance to beat the current interest rates at least. Even with some drop, you could still be ahead. And, with the market as a whole looking for places to put safe money, this could easily be one of the places they look. As they do, this could force the stock price up, even in the unstable market we have right now. And, it has one of the lowest P/E ratios in the sector, something else that makes a bear eater very happy. Take a quick peek at the earnings estimates. I like what I see there too.
The demand for agricultural fertilizers should be up this year too. Another boost.

Now, I don't even know if the strategy lab processes a dividend, or not. I do have several stocks in my portfolio that have hefty dividends. The stategy lab, is a game. Making money in your portfolio, is not. This stock shows every reason to have price growth plus a hefty dividend.

Is there a downside to this stock? Well, they may experience some increasing cost structures to production due to high oil prices. They have a profit margin large enough to absorb most of that, if need be.

So, today, I added this to my portfolio, and I think I will be adding more to it later. Lately, I have been taking a beating on some solar stocks, and if they do not turn around fairly quickly, they will be toast, and TNH may well be my "flight to safety".

Will it beat gold in the near term? I think it has a very good chance to do just that.

Friday February 22, 2008 : 01:09 PM