A 20-Year Bear Market?
June 29, 2009
Long time readers know that I am a huge fan of the work of Neil Howe. His book, The Fourth Turning, was one of the seminal pieces of my reading over the last 30 years. And it has turned out to be stunningly prophetic. Uncomfortably so. A roughly 80 year cycle has been repeating itself for centuries in the Anglophile world, broken up into four generations or turnings. We have begun what Howe called many years ago The Fourth Turning.
Neil Howe is the co-author, with the late William Strauss, of a number of seminal works on the impact of generations on cycles of history. Howe is a founding partner of LifeCourse Associates (lifecourse.com) which provides research to institutions looking to capitalize on generational research.
The June 2009 edition of The Casey Report, the flagship publication of Casey Research, featured a comprehensive 23 page interview with Neil Howe as well as suggestions on how to position your portfolio to profit during a Fourth Turning crisis. I persuaded my friend David Galland to at least summarize it for my Outside the Box this week, and he graciously did so. David is the managing editor of The Casey Report and has had a long career in the financial services industry; as a founding partner of the successful Blanchard Group of Mutual Funds and, before joining Casey Research, as a founding partner of EverBank, one of the big success stories in independent online banking.
Casey Research is offering readers of Out of the Box the opportunity to read the full edition of The Casey Report featuring the Howe Interview, and receive the publication for the next three months with a 100% satisfaction guarantee. For details click here... http://www.caseyresearch.com/crpmkt/crpSolo.php?id=144&ppref=JMD144ED0609A
I trust you will find this week's Outside the Box to be helpful. The more things change.....
Iranian Elections, Israel and the United States
June 18, 2009
Dear Friends,
In the midst of an economic crisis, we are inundated with data - information that often, a few years down the line, turns out to be wrong. Forecasts are made based on a single month's set of data or previous trends, and the public often doesn't know how to read the fine print about margins of error.
The problem is faulty methodology. Most media and even government intelligence agencies assume the information they get from leadership figures is 100% correct, no questions asked - leading to defective analyses. Instead, underlying assumptions should be constantly vetted in the face of new facts. I'd encourage you to consider the intelligence produced by my friend George Friedman at STRATFOR - a trusted source in forecasting future geopolitical trends.
Click here to watch this video by George and his intelligence team. It looks beyond the current protests in Iran and delves into what policy changes could be on the horizon in this pivotal Middle Eastern state. George extrapolates what these recent events mean for President Obama's and Israel's options in terms of Iran and the peace process.
Anyone looking to gain a leg up in the world of finance needs to understand geopolitics and foreign investments. Take a look at STRATFOR, which offers a special deal for my readers. Barron's referred to them in a cover-story profile as the "Shadow CIA," but I would say that their methodology gives them much greater accuracy than their government counterpart.
To Intelligence,
The Geography of Recession
June 4, 2009
Dear Friends:
One of the first things you learn about analyzing a company is how to dissect a balance sheet. What assets and liabilities can be deployed by a company to create equity over time? I've enclosed a fascinating variant on this process. Take a look at how STRATFOR has analyzed the "geographic balance sheets" of the US, Russia, China, and Europe to understand why different countries' economies have suffered to varying degrees from the current economic crisis.
As investors, it's precisely this type of outside-the-box thinking that can provide us profitable opportunities, and it's precisely this type of outside-the-box thinking that makes STRATFOR such an important part of my investment decision making. The key to investment profits is thinking differently and thinking earlier than the next guy. STRATFOR's work exemplifies both these traits.
I've arranged for a special deal on a STRATFOR Membership for my readers, which you can click here to take advantage of. Many of you are invested in alternative strategies, but I want to make sure that you also employ alternative thinking strategies. So take a look at these different "country balance sheets" as you formulate your plans.
Obama’s Strategy and the Summits
April 9, 2009
Dear Friends:
A long-time religious land bridge between the Islamic and Western worlds, Turkey now finds itself an economic gatekeeper, a US-backed contender for the EU and the only key that could unlock Europe from dependence on Russian resources. The value of your dollar is intrinsically linked to last week’s summits—the most important multinational summits in history.
I’d like to share with you an article by my friend George Friedman at STRATFOR. It delves into the Summits (G20, NATO, bilaterals) and explores the connections between finance and geopolitics. In this case, it boils down to two string-holding puppeteers: Germany and Russia. Germany, the largest exporter in the world, is happy to up its production while the US spreads its dollar paper-thin by contributing to an IMF fund that will bail out countries who will in turn spend their money in Germany’s already tremendous export sector. Russia, the largest supplier of natural gas to Europe, too stands to benefit from US contributions to the IMF pot, as their slice of the pie gets bigger with the pan—as long as Turkey keeps her pipes closed.
The decisions made and policies enacted at the Summits trickle down to you and me. To make sense of it all, I encourage you to read STRATFOR. George has arranged a special offer for my readers: click here to take advantage of a 2-for-1 deal; you get a 2-year Membership for the 1-year price of $349. STRATFOR is the best global intelligence service in the world, and their unbiased coverage of the G20, NATO, and other extracurricular summits is unmatched by anyone else.
Yours,
Market Vertigo
January 12, 2009
I get a lot of newsletters from money managers around the country, which I try and read as they are written by people who are —in the trenches,— actually making decisions on behalf of their clients. It broadens my perspective. Frankly, most are not all that well written and unimaginative, but who ever said writing was easy? But some really strike a chord with me. Today's Outside the Box I have read twice, which is unusual for me. Cliff Draughn is a wealth manager in Savannah, Georgia (Draughn Partners) and a good friend. His letter is a wide ranging tome on a variety of topics, but is full of common sense and one that I think will resonate with readers. I trust you will enjoy this.
All In
January 6, 2009
There is an ongoing debate on the current nature of the economic environment and what should the response be by government. Today's Outside the Box by Paul McCulley takes up one view, arguing that we need a federal response and stimulus package to protect the overall economy and save capitalism from itself. Tomorrow, I am going to send yet another view arguing that by doing so we are hurting the prudent investor and businesses that did not over-leverage and behaved responsibly. Both are important to understand. And as I will argue on Friday in my 2009 Forecast Issue, both are right. And that is one of the great economic paradoxes that we are faced with today. Navigating through this period is particularly challenging, but I think it is critical that you understand what Paul says today and what Bennet Sedacca will say tomorrow. Understanding what is going to happen, whether or not we agree with the philosophy behind it should be our goal, as it will make us better able to respond with our own portfolio and business decisions.
By the way, Paul McCulley, the Managing Director of Pimco, always features a "conversation" he has with his pet rabbit at the end of each year. Not only is it instructive, but it can also be downright funny. I think you will enjoy this letter a lot. And sorry about the Outside the Box coming later this week. We lost power for the day yesterday due to a mild ice storm here in Dallas.
The New President and the Global Landscape
October 1, 2008
In times of crisis, those with psychological fortitude discover opportunities that most people miss. A friend of mine in Houston tells me of unending piles of tree limbs broken down by the hurricane. The homeowner laments his disaster; the tree trimmer and the roofer order a new Mercedes. Most of the world sees a Wall St. meltdown. Buffett takes the opening to deploy billions from his cash hoard. They're all seeing the same thing, but they're reacting differently based on different visions of the future.
I've included a piece today from my friend George Friedman over at Stratfor about the landscape the next US President will face. This article is a perfect example of why I rely on Stratfor for my geopolitical intelligence. The newspapers and other media do better or lesser jobs of telling me about what's happening right now. But that's not what an investor needs. What I need - and I recommend for you - is an analysis of what we're going to be facing. That's where George and his team absolutely excel.
For at least the next month, the public conversation is going to be completely dominated by the November election and the political maneuvering to address the financial crisis. There will be tremendous drama. There will be dizzying swings back and forth in emotions, expectations, and more than likely the markets. And if you focus on it, you'll miss the real opportunities to position yourself for the emergence. George has made a special offer on a Stratfor Membership available to my readers, and I strongly encourage you to click here to take advantage of this opportunity. Now is the time to get positioned for future opportunities, while everybody else is wallowing in the here and now.
Haste Makes Waste
September 29, 2008
The purpose of Outside the Box is to present views which cause us to think through our basic assumptions. This week our old friend Michael Lewitt of Hegemony Capital Management gives us a view as to why the bailout bill going down may not be as bad as I think it might. There is much we agree on, however. And part of our agreement is that a deeper recession is in our future. Let me be clear. Muddle Through is now at risk.
I have talked with my publisher, and for the next few weeks of The continuing Crisis, we are going to send more than one OTB per week, and I may also add some short commentary. These are extraordinary times, and I know a lot of you (as I can tell from phone and emails) are worried and are interested in analysis that is not biased with either a perma-bull or perma-bear stance. I will call it as I see it, as always, and forward you material from my best sources.
That being said, we will get through this, one way or another. Sanity and clarity will return, as it always does after times of crisis. I wish you the best in your situation.
Gaming the U.S. Elections
July 26, 2007
This week in Outside the Box good friend George Friedman of Stratfor delves into that enigma that is Executive power and Presidential elections. George ventures to assess the current President in light of former Presidents, utilizing a methodical rubric of measure to analyze the capabilities of what in all perceptions is a lame duck President with respect to domestic influence and foreign perception. He also analyzed the presidential race. I found this a very interesting piece.
George's company Stratfor provides some insightful and comprehensive research on geopolitical events and global affairs. George continues to kindly provide my readers a discount to his normal subscription rates, obtained by clicking here.
I hope you find the article informative, providing a degree of inference into the current complex political landscape.
Life after Debt - Russia’s New Millennium
February 26, 2007
I got a lot of response from my recent letter on South Africa. Today we turn to another emerging market country. Since the late 90's, what country's equity market has performed the best? At first thought, many might say China or India due to the robust economic growth that has taken place. Still others might weigh in with countries such as Brazil or Dubai because of their booming commodities and tourism sectors, respectively. The answer is Russia with it boasting a 37 fold increase since 1998!
Every few months I get a lengthy but very thorough and enlightening newsletter from Eric Kraus called "Truth and Beauty" about the Russian economy and markets. Eric works in the finance industry and is an accomplished money manager. His writing reflects his positive views of the Russian markets along with a candid appraisal of the problems. But his writing on Russia is quite different from the views we get in the Western press. I asked him to give me a brief synopsis of his views for my readers. This is truly Outside the Box, and a balance to what we normally read.
If you want to subscribe to his letter, you can write Nadia@nikitsky.com and she will add you to his list.
Back to Iraq
November 9, 2006
The past couple of days have been filled with anticipation over the outcome of which party will emerge victorious during this year's elections. Adding to the flurry of activity, Defense Secretary Donald Rumsfield unexpectedly announced his resignation raising further questions about the future of American policy. Both the parties and individuals newly appointed to government positions will have an impact on both fiscal policy for the markets (dividend and taxes) and on our foreign involvement (the war in Iraq).
My good friend, George Friedman, has written an excellent analysis of the situation and has allowed me to freely send it to you, my readers. In his article, he provides a good review of the key events of the past several days and then directs his attention towards what decisions will be faced by the new representatives.
George has decided to continue offering a special discount of 50% off the normal subscription price to his service. In order to receive the discount, you must click here. I trust that you will enjoy this special edition of "Outside the Box."