@T.E.P.You know, the answer is not straight forward. Not in my mind anyway. I'm a value investor. That means I try to buy at a price that I think will provide me a comfortable margin to the cash that I expect the business will deliver into
my pocket. That needs to meet two hurdles - first, the business needs to generate more cash than it consumes
over time. Second, I have to have a sense that that cash will get to the pockets of minority shareholders.
Based on those hurdles, it is not clear to me that FRM offers value
at any price. If it does not deliver the above
over a cycle, then all we are doing is hoping to ride waves of market sentiment
with each cycle. For me, this is speculation more than value investing.
Even if the business met my value investing criteria, I would still need a very hefty margin here to account for all the uncertainty (low market strength, variability in largest input costs, weather risks, disease risk, price taker on input costs etc etc). But if I'm speculating on all of that
additionally to how the market will react in the next cycle - then I need so much margin of safety that I really start losing interest.
Here's how I view it from a numbers perspective:
https://hotcopper.com.au/posts/37875315/single
