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About one month ago, Potash Corp. (POT) reported 2008 2nd quarter results. These results have inspired numerous articles and comments, all well worth reading, as well as the report itself.

Through these reports, it has become the practice of the CEO, William J. Doyle, to offer tremendous insights into his company, as well as the general industry trends in fertilizers.

This has resulted in a massive flow of information so strong and positive that it is difficult for anyone to digest it all in just one sitting. Therefore it seems best for all concerned to have many different articles written by many different people, in order to fully understand and appreciate what he is saying.

One set of numbers that some people may have missed concerns the projected 2008 gross margin increase. In relation to the previously announced price increases that are already in the pipeline for the remainder of 2008, he said,"We are now forecasting 2008 potash gross margin more than 300% higher than achieved in 2007," and "Our nitrogen and phosphate margins are now forecast to exceed 2007 levels by more than 85% and 200% respectively."

To better understand and appreciate what his words and numbers actually mean, it's necessary to go back to the year 2007 gross margin results for each segment, and work forward from there. These were 912.3 million for potash, 536.1 for nitrogen, and 432.8 for phosphate. These numbers must now get multiplied by their respective 2008 projected percentages to get 3649.2 for potash, 991.8 for nitrogen, and 1298.4 for phosphate. When added together, the projected 2008 total gross margin becomes 5939.4 million, or almost 6 billion, which is a 216% increase over the actual 2007 total gross margin of 1881.2 million.

Is this what has caused the recent 13 day, 20% sell-off in stock price from the close of 200.69 on July 23rd, the day before the report was issued, to the close of 160.91 on August 11th?

Or was it just a part of the 38 day, 33% sell-off from the June 17th all time record closing high of 239.5?

The year to date stock price increase at the close of the day, August 11th, 2008, was about 12%. Does this 12% increase accurately reflect a year on year projected 216% total gross margin increase? Or, am I supposed to believe that the numbers given were simply not good enough to justify the stock valuations?

Or, shall I conclude, once again, that investors simply don't understand what this company's stock is actually worth?