by Alexander Green, Chief Investment Strategist, The Oxford Club
Friday, December 6, 2013: Issue #2180
Today I’m going to reveal the biggest moneymaking opportunity in world history. If that sounds like hype or bluster, please read on.
Because the major trend I’m referring to is not just an enormous opportunity but completely unstoppable. Yet most investors can’t see the forest for the trees. And you can thank the national media for that…
Think about it. Outside your own personal experience, virtually everything you know about the world today comes to you through newspapers, magazines, television and major media websites. Unfortunately, these forums deliver a highly distorted picture of the world.
Each day the overwhelming majority of people quietly show up for work and go about their business: making things, providing services, taking care of their families and buying what they want or need. But this doesn’t make the news.
And it’s not hard to understand why. No one wants to tune in to hear about the buildings that didn’t burn, the planes that didn’t crash, or the companies that didn’t file for bankruptcy.
“The news” consists almost entirely of reports of crime, war, terrorism, corruption, accidents, natural disasters and political dysfunction. (A recent study showed that over 90% of the articles in The Washington Post had a negative slant. Television is even worse and far more sensational.)
I’m not saying our problems aren’t real. They are. But the media paints a decidedly gloomy picture. Most of what is happening around the world each day is positive.
And these developments represent huge investment opportunities.
But they are only available to those who see the big picture. So let me paint it…
Can You See It?
Throughout 98% of human history, nobody worried about having enough money for retirement because almost no one lived to be old. By 25, just about everyone was dead, usually of unnatural causes. We battled the elements and hunted and scavenged to survive.
As a species, we existed on the brink of starvation in a world filled with danger.
Today we have a great bias, a widely accepted belief in the steady nature of progress.
Yet for most of human history, there was none.
More has been invented in the past 100 years than the previous 10,000. Most of human history was one prolonged era of nonprogress.
Not anymore. Your ancestors a few generations removed would marvel at contemporary life: unlimited food at affordable prices… plagues that killed millions – polio, small pox, measles, rickets – all but eradicated… cancer, heart disease and stroke incidence in decline… the advent of instantaneous global communication and same-day travel to distant cities… mass home ownership with central heat and air and limitless modern conveniences… senior citizens cared for financially and medically, ending the fear of impoverished old age.
Yet what do you hear 24/7 from the news media’s blow-dried talking heads? That we are in decline, that America is experiencing the last days of Rome.
Change Is Coming
Don’t believe it. The political dysfunction in Washington is real. But it isn’t the end of the world. The annual budget deficit is coming down.
And reform is coming. It will arrive when Americans finally demand it from their elected representatives.
Currently, Congress has the lowest approval rating in history. Yet 91% of incumbents just won re-election. When voters get angry enough to actually cast their votes differently, things will start to change.
In the meantime, here are three words to help clarify your thinking: Commerce trumps politics.
Despite all the blundering in Washington, in the last five years U.S. corporations have experienced record profits, record profit margins and record net income as a percentage of GDP.
The pols in Washington are doing a lousy job. But the millions of people showing up for work in the private sector each day are doing a fine one. That – not just the Fed’s easy-money policies – goes a long way toward explaining why the Dow has hit consecutive all-time highs this year.
An Array of Revolutions
Technology is revolutionizing our lives.
Thirty years ago, most Americans didn’t have a personal computer. Twenty years ago, most didn’t have a cellphone. Ten years ago, most didn’t have a high-speed Internet connection.
And lots of exciting new developments are just ahead. Today we have networks, sensors, cloud computing, 3-D printing, new genetic therapies, artificial intelligence, robotics and dozens more cutting-edge technologies.
Thanks to advances in hydraulic fracturing and horizontal drilling, the country is undergoing an energy revolution. Just two years ago, doomsters were wringing their hands, lamenting not our dependence but our addiction to foreign oil. Yet this year we passed Russia as the world’s largest oil and gas producer. And we are about to enjoy an enormous new export market for liquefied natural gas.
Medicine is revolutionizing our lives, too. When Calvin Coolidge was president, his 16-year-old son, Calvin, Jr., got a blister on his foot playing without socks on the White House tennis court. It became infected. A week later he died.
In 1924, before the advent of antibiotics, there was nothing the country’s best doctors could do for the son of the world’s most powerful man. Incidents like this were depressingly routine.
Today we have all kinds of amazing drug therapies and medical devices safeguarding our health. The average life span of Americans has almost doubled in the last 100 years. Even surgery is far less traumatic than it used to be. Arthroscopic, laparoscopic, endoscopic, drug-eluting stents – these are all commonplace and engineered to get you up and around in no time.
We are living longer, healthier lives than ever before. Educational attainment and standards of living have never been higher. Our free-market system meets all of our needs… and most of our wants. And our amazing capital markets give everyone willing and able to save an opportunity to profit from these developments.
Yet most Americans are walking around in a funk, complaining that the country is on the wrong track. The American Dream is lost. Our kids face a diminished future.
As the essayist Randall Jarrell observed: “People who live in a Golden Age usually go around complaining how yellow everything looks.”
Most people – even scientists and sociologists – fail to recognize the incredible power of dynamic change. Human beings, technology and capital markets now operate as a collective problem-solving machine.
We underestimate the power of human ingenuity and the enormous incentives the free market provides for innovators and entrepreneurs. Instead, we focus on the daily white noise of setbacks, problems and negative developments, and completely miss the real story, the major trend.
As the world’s most successful investor, Warren Buffett, said in a recent interview: “It hasn’t paid to bet against the United States for the past 237 years… and I wouldn’t start now.”
There are enormous investment implications for those who accept this point of view. But there isn’t space for me to flesh everything out in a 1,200-word column. That’s why I wrote An Embarrassment of Riches: Tapping Into the World’s Greatest Legacy of Wealth, my new book out this week from Wiley & Sons.
History shows that the world’s great investors – men like Benjamin Graham, Warren Buffett, Peter Lynch and John Templeton – have a long-term optimism about the future that simply doesn’t have an off switch. But you have to fully understand why it’s justified.
That’s why I wrote the book, as an antidote to all the pessimism and anxiety out there. (You may have some friends and family members on your Christmas list who could use a bit of cheering up, too.)
I’m confident you’ll find the book to be a profitable read. And while I can’t guarantee it will make you richer, I do promise you’ll feel a lot more optimistic.
For more information on An Embarrassment of Riches, click here.
How to Profit From the Biggest Trend of All
Today I’m going to reveal the biggest moneymaking opportunity in world history. If that sounds like hype or bluster, please read on. Because the major trend I’m referring to is not just an enormous opportunity but completely unstoppable. Yet most investors can’t see the forest for the trees. And you can thank the national media for that…
Cutting Through the Hype in Biotech
When a woman, claiming to be the wife of a deceased general from Nigeria, writes to us saying she needs our help getting $10 million out of the country and in return we’ll get 20% of the money, most of us know that’s a load of bull. But when the CEO of a publicly traded biotech company tells us his drug is the next great thing?
Are Diamonds an Investor’s Best Friend?
All that glitters isn’t gold… but can still be worth a fortune to investors. For example, I have my eye on a sparkling commodity that’s taken its licks this year but looks like it could have a stellar 2014. It’s not gold. I’m talking about diamonds. And diamonds have been selling cheap.
What You Need to Tell Your Kids Today
Today is Black Friday, Americans’ annual homage to our greatest passion: shopping. And I’m not looking to spoil your fun. But before you hit the stores, I want to skip my typical commentary on the energy sector and talk about how to model good financial habits for your kids.
|Wealth Building||Investment Strategy||Emerging Markets||Global Metals|
|Energy & Infastructure||Healthcare & Biotechnology||Income and Retirement||Technology|
Last month, movie buffs flocked to theaters around the U.S. to catch the much-anticipated premiere of the newest Hunger Games movie, Catching Fire. Over opening weekend, the cinematic production – based on the second book of Suzanne Collins’ best-selling young adult series – garnered $142.8 million. That puts it in fourth place for the most profitable U.S. movie opening…
Banks are supposed to be a financial safe haven: a place to store money and valuables. People trust their banks to secure their checking and savings accounts, handle their loans, and offer reliable investment opportunities such as CDs. That trust usually extends to the stock market too.
On March 5, 2013, the S&P 500 hit an all-time new high of 1,539.79. By May 20, it was up to 1,666.29. Then in July, it set another new high. The same thing happened in August… and in September… and again in October… and yet again on November 18. Judging by its track record since early 2009, this market seems unstoppable.
Like it or not, the holiday shopping season has already begun. Christmas music is playing over speakers, holiday-themed paraphernalia is lining store shelves… and the markets are wondering how retailers are going to fare over the next six weeks.
Move over, BRIC countries. There’s a new investing acronym in town. And there are plenty of experts out there preaching how it could make you a mint. Whereas BRIC is the term economist Terence James O’Neill coined back in 2001 when he headed up the Goldman Sachs global economics research department, MINT came about much more recently thanks to Fidelity International. Yet it’s only catching on now with some help from O’Neill.