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Comment by bluejay2 | Hacker News Reader

One way would be to buy protein producers (e.g. Tyson) . The hard part is figuring out how much of the expected benefit is already factored into current stock prices though. As another user mentioned, this is not exactly breaking news to the investment community. Tyson for example was up 72% in 2019 (vs 32% for the SP500 and 27% for an index of consumer staples companies, of which Tyson is one)

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The irony is that an increase in stock price is supposed to reflect future value (of dividends).

In this case, the 72% does not accurately reflect the increase in value, unless they almost double their dividend for quite a few years after the whole Chinese pork fiasco.

Market effect are exaggerated by investors and speculators. (Read: amplified, not fabricated [usually].)

Why should we believe that you're right and the rest of the market is wrong?

The rest of the market knows this and uses it to make money.

I am not sure what you mean in terms of someone being right and someone being wrong.

Edit: The point about future value of dividends is a common approach. My personal addition was that 72% is probably an exaggerated effect, but these kind of swings are to be expected, with later corrections. The point about irony is that when people buy shares, they follow the price of sale of one share, they don't usually try to calculate the future value of dividends. A case in point would be Amazon. However, with Amazon, people expect dividends at some unspecified point in the future.

And how much money did you invest based on that thesis?

None. The correction would not really warrant a short. And moreover it could take a long time to happen. I don't know enough about how people think about pigs to know whether to short and at what time.

Isn't Tyson a net protein destroyer? They take a larger amount of plant protein and turn it into a smaller amount of animal protein.

While in this case protein is just generic for 'meat', in the specific cast Tyson is taking plant protein that you or I cannot consume and turning it into a protein that we can eat. Does an oil refinery destroy oil? Well, I guess so, but that is not exactly the term that is commonly used to describe the refining process.

It wasn't clear to me that "protein" was generic for "meat", but in this specific case soybeans can be turned into tofu. And that's a reasonably popular protein source for humans in China -- especially if high prices of other human-consumed proteins causes product substitution.

They produce more protein than they consume. The animals convert carbohydrate to amino acids (well, the bacteria in their gut does).

You seem to have forgotten https://en.wikipedia.org/wiki/Feed_conversion_ratio#Pigs ?

They have nitrogen-fixing gut bacteria now?

No, the bacteria in the rumen convert amino acids that cows and humans can’t digest (and hence are of no nutritional value), into amino acids they can digest.[1]

Thus, they are net producers of useful amino acids.

[1] http://www.publish.csiro.au/ebook/chapter/SA0501041

That's exactly right.

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