From Alan Abelson this week; ...such as President Obama's remarkable revelation that China might grow tired one of these years of lending us money (who knew?). And that, he posited, might pose a serious threat to our ability to continue to happily live beyond our means. Wow! Good stuff.
This article brings up some of the reasons I favor Norway as an investment destination.
According to this guest post in Barron's about demand for natural resources there are 306 million farmers in India. According to Google Public Data that exceeds the US population. Yikes.
Yesterday a reader asked what type of tools I use for stock selection with the context, as I took it, being along quantitative lines. Obviously there are plenty of quants who are wildly successful by every definition of the word but there must be an element of what's right for you in this discussion as well.
The reason I am not comfortable with quantitative analysis is that I perceive there to be a too much of a head down in the books and never looking up aspect to it. Generically speaking models cannot account for everything and occasionally when a quantitative model misses something the ensuing blow up becomes newsworthy.
While the tone of this may be unfair, it is my perception so my reality. I feel as though value can be added by relying on common sense.
A possible tie in to this week's video; I was saddened and shocked to hear (three months after the fact) that former pro-beach volleyball player Mike Whitmarsh committed suicide in February. Whit and his partner Mike Dodd were one of the dominant teams on tour, mostly in the 1990s and a little into this decade. He was living in San Diego, working in real estate in some capacity, had a beautiful wife and two kids. As a player he earned $1.6 million which may not have made him wealthy after netting everything out but handled intelligently it was enough to make things easier than for most folks.
I believe the tie in to the video is along the lines of the importance of figuring yourself out (which may not be easy and may be an ongoing process) before getting too caught up in how much your portfolio is up or down. Very sad news indeed.
The picture is from a simpler time for our fire department picking up hose after a drill (if you watched this weeks video that comment will make sense).
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12 comments:
Happily Norway's victory in Eurovision wasn't one of the reasons!
Gotta love that Norwegian kid who won the Eurovision -- he's got a lot of heart.
I'd like to invest in Norway without being bound to the price of oil. STO is the only ADR on a major US exchange, and there are no ETFs.
So, Roger, of the 20+ Norwegian stocks available OTC, what would you pick? I only ask because it's much harder to do research in this space. (You don't have to be specific, but finance, utility, consumer?)
Roger,
are you looking at other countries in europe, such as Italy, France, or Germany?
Best,
Jeff from Milan, Italy
I enjoy Abelson and today was no exception: Particularly agreed with his eulogies to the loss of a couple good men -- does seem to be a time for eulogies unfortunately -- and his wry take on Chinese willingness to fund US profligacy. But Paul Krugman had an interesting take on that subject at http://tinyurl.com/ploq79 that is worth a comment even from an amateur like me. A couple tied-together excerpts:
"Right now we’re in a liquidity trap, which ...means that we have an incipient excess supply of savings even at a zero interest rate. ...the argument that a reduction in China’s dollar purchases would be contractionary for America because it would drive up interest rates is equivalent to the argument that fiscal expansion is contractionary for the same reason — and equivalently wrong."
Obviously I am not in Krugman’s league when it comes to good economic calls or knowledge of economics generally but my initial reaction was not to agree with this: True, the incredible expansion in money supply since 2007 -- literally an order of magnitude increase in monetary base -- seems to have barely fended off deflation thus far but if there is even a smidgen of truth to monetarism then this flood of dollars means inflation must come, interest rates must rise, and a dollar must be worth less as a store of value; someday ...but perhaps not today and, if deflationary pressures continue, perhaps not for a perilously long time.
Mind you, after global recession eases, I do believe the $USD will eventually lose its place as the world's reserve currency (and the loss of seigniorage can only do our competitive juices good IMHO) but short of apocalypse see no reason to believe this will occur quickly or that other currencies will not suffer correspondingly in the interim -- and man would I hate to be a Chinese worker if/when the Yuan floats; come to think of it I'd hate to be his/her boss too -- or that the $USD will not be an integral part of whatever regime emerges.
But we continue to live in very ‘interesting’ times; doesn't seem to be much doubt about that.
Roger,
As someone who lived through a very close call in the Indian fire of 2002 (southwest Prescott), I value a smoothly running fire department.
I'm very sorry to hear that some turmoil has overtaken the Walker FD.
I don't understand why people in these organizations don't realize that discord will just discourage people from volunteering for critical organizations such as volunteer FDs. We run into similar problems here occasionally on the Board of Directors of our HOA. It's hard enough to get people to serve without injecting infighting and nastiness...
AAlan, i've probably written about owning STO 100 times along with some short term debt for some accounts. I would be very comfortably adding another name with a 2% weight and I do think there are enough names to choose from even if not on the NYSE.
Retired in Prescott, never been in an HOA, TG, but have heard stories of course. I simply cannot fathom the motivation behind the power grab. It is an ugly chapter but will be resolved by mid-June.
Jeff,
France; one name that i have owned for just a couple of account for a while
Germany and Italy; no investment interest.
RR, I am just about finished reading Faber's book on endowment investing - due to your mentioning it. It has certainly exceeded my expectations. Those guys really understand statitsics (math) and its limtations. Which is uncommon, I think, for finance (economist) guys. I am no expert in the proper use of statistics, but like pornography, I know it when I see it.
Once again, I have reached a little higher, having stood on your shoulders
thank you for the kind word
Roger mentioned his concern over protectionism before, the following are some thoughts by Mauldin:
"Looming protectionism worldwide is a problem. (See the article at
http://www.msnbc.msn.com/id/30758018.)
Towns in Ontario, Canada with a population totalling 500,000 have
effectively barred US contractors from doing business with them, in retaliation
for job losses stemming from US protectionism in the stimulus plan. That
movement is spreading. A US steel mill with 600 union jobs will have to close
down because its owners are not US-based, and thus it is not technically a US
supplier. They are losing jobs to US-owned mills — but those are US jobs.
The insanity goes on and on. As I have written for many years, the one thing
that really gets me worried is protectionism. That can make this very
significant recession into a depression quicker than you can imagine. Bad ideas
have bad consequences.
All in all, we face some very difficult decisions, not just in the US but all over the
developed world. Ironically, the less developed nations will have fewer
problems and on a relative basis will likely grow much faster than the
developed world. But, multi-trillion-dollar deficits and massive new programs
are not the right answer."
For those interested here is the link for Mauldin's report in its entirety...
http://www.ritholtz.com/blog/2009/05/faith-based-economics/
The last 10 years are not looking unlike 1968 - 74. Could we have more of the same, ie giant run back up followed by some consolidation for several years?
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