 Good day fellow investors. Our friend Sven Hasselt wrote in a comment what do I think about COCO. It is at multi-year lows and when I see a commodity at multi-year lows I immediately jump to investigate because commodities are easy. You have to see what's the supply, what's the demand. If there is too much of supply prices go down. If there is not enough supply prices go up. So I want to see what will happen and you cannot affect demand. Demand is there. It depends only on how much COCO you're going to eat and that's pretty stable and slowly growing as the world develops. So it's all about supply there. If I can estimate that next year the crop will be lower so that supply will be lower then I can expect COCO prices to go up. So let's see what's going on in the COCO world and how we can go about investing in it. So COCO prices in history have been pretty, pretty volatile and you can see that in the last decade they went up to above 3000 then dropped around 2013-2012 to almost 2000 then went up again above 3000 then dropped again to the current 2000. If I look at this long-term chart from an inflation perspective current COCO prices are below what was the global inflation rate. So from a commodity perspective COCO prices are relatively cheap. The next thing we have to look at is COCO supply and demand. Go to the international COCO organization you check what they are saying about what's going on and you can see the reason for the low COCO prices. The forecasts for 2016-17 have been very very positive. Increased production by 18.1% increased grinding that leads to surplus of 382,000 metric tons. In such a situation prices go down. Additionally COCO bean arrivals to ports in the Ivory Coast are up 35% compared to last year which means there would be much more supply and it won't be positive for COCO prices just because they are now at 2000 doesn't mean it's a good investment. We really have to wait for an inflection because the next crop will also be good thanks to favorable weather so it doesn't mean it's a great investment now. Nevertheless we can still profit from COCO prices and COCO price movements. One way is you can go short the ETF, COCO ETF. There are two COCO ETFs one it's called Nib and the other is called Jock so you guess where the names come from. If we look at ETF prices they're also very low they follow COCO prices through future contracts so they're pretty good proxies for COCO investing. However when shorting you never know what can happen but if you can buy options puts if puts and calls are your thing this might be interesting. Nevertheless there is another way of profiting from declining COCO prices and that is to buy those companies that their biggest costs is COCO like Hershey, Lint or Berry, Kaleba or however do I pronounce it. So Hershey has 10 to 15% of cost of goods sold depending of COCO prices. If COCO prices decline it means that here and there not immediately but Hershey's margins will increase. The last time COCO prices decreased from 3000 to 2000 Hershey's margin increased from 46% gross margin to 48% gross margin. So that would reflect into Hershey's earnings, make it grow and of course should reflect into higher stock prices. However the price earnings ratio are crazy. Hershey has above 30, Lint is above 30 almost 40 and this Berry Kaleba is also very high and above 30 so very very expensive because the low COCO prices are already included in the price. However when that gets confirmed usually stock prices go even higher. Call it a crazy market but that's how the market is. So to conclude just because COCO prices are low doesn't mean they are a good investment. The next crop coming will again be a great crop. Warehouses in the Ivory Coast are full. The farmers if you read the newspaper cannot sell their COCO because nobody wants it because the warehouses are already full. So it will take some time for the supply glut to be sold. Somebody will plant less COCO in the next crop year and then the COCO price will start to recover. So there is still plenty of time to invest in COCO. So for now we'll keep it there if you want to invest in Hershey or if you're thinking about those chocolate stocks you might want to take advantage of short-term trends. However for me they are overvalued now. Nevertheless we'll follow it. I have seen also that COCO prices are very low and I want to investigate also if there is some potential there because it's a little bit different and because all those COCO coffee depend a lot on the weather and the weather is volatile. However if you position yourself if you have a little medium term outlook you can really benefit by trading options or whatever in these commodities because it doesn't depend on what the market thinks. It depends on supply and demand and that can be played on with low risk high reward bets. Thank you for watching. If you have any other ideas like the COCO play, coffee play stocks that follow that share it in the comments let me know what do you think. Like it if you like the content and I'll see you in the next video.