February 5, 2019 - Quote of the Day

“It’s a funny thing about life. If you refuse to accept anything but the best, you very often get it,” said British Novelist, Somerset Maugham.

February 4, 2019

Global Market Comments
February 4, 2019
Fiat Lux

Featured Trade:

(THE MARKET FOR THE WEEK AHEAD, or FROM PANIC TO EUPHORIA),
(SPY), (TLT), (AAPL), (GLD),

February 4, 2019 - Quote of the Day

“Sometimes, when you jump off a bridge, you have to grow your wings on the way down,” said author Danielle Steele.

February 1, 2019

Global Market Comments
February 1, 2019
Fiat Lux

Featured Trade:

(THE DEATH OF KING COAL),
(KOL), (PEA),
(THE BRAVE NEW WORLD OF ONLINE RETAILING),
(SNAP), (GPRO), (APRN), (SFIX)

February 1, 2019 - Quote of the Day

“It’s really dangerous to look for rationality in the market, so much of it is psychology…. Stocks will rotate from flawless to hopeless,” said Howard Marks of Oaktree Capital Management.

January 31, 2019

Global Market Comments
January 31, 2019
Fiat Lux

Featured Trade:
(MARKET GETS A FREE PASS FROM THE FED),
(SPY), ($INDU), (TLT), (GLD), (FXE), (UUP),
(APPLE SEIZES VICTORY FROM THE JAWS OF DEFEAT),
(AAPL)

January 31, 2019 - Quote of the Day

“A man who is the master of patience is the master of everything else,” said George Saville, a professional soccer player.

January 30, 2019

Global Market Comments
January 30, 2019
Fiat Lux

Featured Trade:

(WHY WATER WILL SOON BE WORTH MORE THAN OIL),
(CGW), (PHO), (FIW), (VE), (TTEK), (PNR),
(WHY WARREN BUFFETT HATES GOLD),
(GLD), (GDX), (ABX),

Why Water Will Soon Become More Valuable Than Oil

If you think that an energy shortage is bad, it will pale in comparison to the next water crisis. So, investment in fresh water infrastructure is going to be a great recurring long-term investment theme.

One theory about the endless wars in the Middle East since 1918 is that they have really been over water rights.

Although Earth is often referred to as the water planet, only 2.5% is fresh, and three quarters of that is locked up in ice at the North and South poles. In places like China, with a quarter of the world's population, up to 90% of the fresh water is already polluted, some irretrievably so by heavy metals.

Some 18% of the world population lacks access to potable water and demand is expected to rise by 40% in the next 20 years.

Aquifers in the US which took nature millennia to create are approaching exhaustion, especially in Northern India and California’s Central Valley. While membrane osmosis technologies exist to convert seawater into fresh, they use ten times more energy than current treatment processes, a real problem if you don't have any, and will easily double the end cost of water to consumers.

While it may take 16 pounds of grain to produce a pound of beef, it takes a staggering 2,416 gallons of water to do the same. Beef exports are really a way of shipping water abroad in highly concentrated form.

The UN says that $11 billion a year is needed for water infrastructure investment, and $15 billion of the 2008 US stimulus package was similarly spent.

It says a lot that when I went to the University of California at Berkeley School of Engineering to research this piece. Most of the experts in the field had already been retained by major hedge funds!

At the top of the shopping list to participate here should be the Claymore S&P Global Water Index ETF (CGW) which has appreciated by 14% since the October low.

You can also visit the PowerShares Water Resource Portfolio (PHO), the First Trust ISE Water Index Fund (FIW), or the individual stocks Veolia Environment (VE), Tetra-Tech (TTEK), and Pentair (PNR).

Who has the world's greatest per capita water resources? Siberia, which could become a major exporter of H2O to China in the decades to come.

 

 

 

 

WaterfallThe New Liquid Gold?

Why Warren Buffet Hates Gold

After seven years in the penalty box, gold is finally starting to come alive, and the Armageddon crowd is absolutely loving it. Maybe after ten years of rising, stocks are finally expensive on a relative basis?

These are the guys who are perennially predicting the collapse of the dollar, the default of the US government, hyperinflation, and the end of the world.

Better to keep all your assets in gold and silver, store at least a year’s worth of canned food, and keep your untraceable guns well-oiled and supplied with ammo, preferably in high capacity magazines.

If you followed their advice, you lost your shirt.

I have broken many of these wayward acolytes of their money losing habits. But not all of them. There seems to be an endless supply emanating from the hinterlands.

The “Oracle of Omaha” Warren Buffet often goes to great lengths to explain why he despises the yellow metal.

The sage doesn't really care about the gold, whatever the price. He sees it primarily as a bet on fear. I imagine he feels the same about Bitcoin, the modern tulips of our age.

If investors are more afraid in a year than they are today, then you make money on gold. If they aren't, then you lose money.

The only problem now is that fear ain’t working.

If you took all the gold in the world, it would form a cube 67 feet on a side, worth $5 trillion. For that same amount of money, you could own other assets with far greater productive earning power, including:

*All the farmland in the US, about 1 billion acres, which is worth $2.5 trillion.

*Seven Apple’s (AAPL), the second largest capitalized company in the world at $731 billion.

Instead of producing any income or dividends, gold just sits there and shines, making you feel like King Midas.

I don't know. With the stock market at an all-time high, and oil trading at $53/barrel, a bet on fear looks pretty good to me right now.

I'm still sticking with my long-term forecast of the old inflation adjusted high of $2,300/ounce.

It is just a matter of time before emerging market central bank buying pushes it up there. And who knows? Fear might make a comeback too.