Potash stock can be a great investment vehicle. Potash is a limited resource, like oil. It is not a renewable resource. Although it is not as widely known as oil, the fundamental scarcity of potash makes it an interesting choice for a long term investment. Because many factors that contribute to the price of potash are responsive to inflation trends, such as transportation costs, potash stock may have some of the positive aspects of an inflation hedge as companies are able to adjust raw potash prices to keep pace with inflation. Future scarcity may push raw potash prices higher. This could increase the margins of potash companies. Increased margins almost always have a profound effect on a company's stock price.
Potash is one of the most essential nutrients that crops need to produce strong yields. Potassium is critical for protein synthesis in most leafy plants and helps plants grow strong roots. Plants that do not receive enough potassium often exhibit stunted growth. Proper levels of potassium during the growing season will help plants resist diseases. Potassium also plays a role in cold tolerance. Plants that are not absorbing sufficient potassium may succumb to cold weather spells. Potassium deficiency is a serious problem if not addressed early in a plant's life cycle. The price of potash will likely rise over the coming years as the earth's population increases. As an ever greater quantity of food becomes necessary to feed the planet's population, the demand for potash will increase commensurately. Potassium also has a variety of non-agricultural uses.
The golden rule of buying stocks is that one should buy low and sell high.