Five straight up weeks for the stock markets do not create a barometer forecasting another up week. They do, however, reflect an important shift in investor attitude from panicked despair toward more normal uncertainties. There are always uncertainties in investing. Those seeking certainty either try so hard not to lose that they overlook more subtle risks or settle for the miniscule returns available from so-called risk free investments like money market funds that pay less than the increase in inflation.

The global economic recovery has begun, at least in the sense that things are getting worse more slowly. Central banks and their governments are in rough agreement that eased interest rates and increased spending will boost their recoveries. Their approaches vary but they have not stooped to include widespread attempts of protectionist shielding of domestic industries. Such trade restraints hobbled the recovery from the global depression of the 1930’s, a lesson well learned except by a few pandering Congressmen.

Earnings reports are coming in for the March quarter with improving but still negative returns. The June quarter will continue these trends with unequivocal recovery not ringing out until the end of the year. Meanwhile, stocks are anticipating these trends by several months in their usual manner. It will be difficult for them to sustain their spring rally in the face of the mixed news from earnings reports and I would be a little quicker than usual to sell those that may have gotten a bit ahead of themselves.

One of the biggest mistakes amateur investors make is the premature selling of sound positions on passing news items like job layoffs. These have almost always already been discounted in stock prices and the trick is to try to look months ahead for prospective developments that have not been reflected in current trading prices.

The stock market is one of the better tools for forecasting these events. Despite all the media chatter about bank stocks, their performance has been spotty while one of the best performing sectors features the makers of fertilizer. This may call to mind the public sentiment toward prominent bankers but probably reflects sustained demand worldwide for increasing agricultural yields.

Our fertilizer stocks, Mosaic (MOS-$45 on 4/14) and Potash Corp (POT-$89) were slapped down in the Panic of 2008 but are coming back nicely. Agrium (AGU-$41) is a smaller addition. Based in Calgary, it retails agriculture products in North America, Argentina and Chile. It also produces all three agricultural nutrients and has recently expended these capabilities through mergers. Earnings will be around $6.25 this year, off 25%. Sales are $10 billion, growing at 32%.

Agrium now wants to expand its production side through a takeover bid for CF Industries (CF-$74), a smaller ($4 billion sales) Illinois-based maker of agricultural chemicals. CF rejected the offer but Agrium is persisting with an increased offer now at $35.50 plus one share of Agrium, a current value of $76.50. This is a 3% arbitrage premium but CF’s debt free balance sheet could well induce a higher bid in a contested takeover like this one.

Other attractive fertilizer stocks include Sociedad Quimica y Minera de Chile (SQM-$32) and Terra Nitrogen (TNH-$137). All share reasonable valuations and basic products needed by expanding the populations of the developing world.

Although energy prices are sagging now under decreased demand in industrialized countries, their use is building at faster rates in less developed areas. China’s exploration company, CNOOC (CEO-$114,) had booming profits in 2008 but warned that slumping prices will take these down in 2009. They should still be around $11 a share, a reasonable valuation accompanied by a 4.8% yield.

Closer to home, lovers of low-priced stocks should like Endeavour International (END-$1.35), a Houston-based oil and gas exploration company operating primarily in the North Sea. Earnings estimates are conjectural but I like a Texas company that named itself after Captain Cook’s flagship. I also like that it just announced its first U.S. production.