"But this time it's different!!!" Any time you hear that from a financial analyst, you should run. Or better still, take the other side of his trade! If you're numerically oriented, you know that patterns tend to revert to the mean. If you're historically oriented, you know that the more things change, the more they remain the same. Can companies really make money selling a product for less than it costs to make - even in volume? Ask Buffett why he sat out the tech boom....
Today I'm passing along a piece from George Friedman, Chief Intelligence Officer at Stratfor. He makes the absolutely compelling argument that issues of war and peace follow these same guidelines. There are ebbs and flows, but war between countries is an inevitable part of history, and it's driven by simple geography. The recent war between Russia and Georgia was precisely such a "reversion to the mean," double-entendre fully intended.
Navigating financial markets requires an understanding of the geopolitical issues - the war & peace - that drive them. What does this war mean for Russian gas supplies to Europe? What does this war mean for the future of the BTC pipeline? Does this war make Iranian inclusion in global markets more or less likely? Is Russia just "vertically integrating" its control of energy flows with less-than-subtle tools?
You may have seen Stratfor quotations recently in the New York Times, Bloomberg, and Barron's. But personally I need more than just snippets. Quite simply, George's team is the best out there, and I encourage you to take advantage of the special offer that George makes available for my readers. The old Cold War is heating up, and this is no time to be without intelligence on what's coming next and analysis of what it means.
Read the analysis below and get a solid reminder that it's not different this time - or any other.
John Mauldin, Editor
Outside the Box
The Real World Order
On Sept. 11, 1990, U.S. President George H. W. Bush addressed Congress. He spoke in the wake of the end of Communism in Eastern Europe, the weakening of the Soviet Union, and the invasion of Kuwait by Saddam Hussein. He argued that a New World Order was emerging: "A hundred generations have searched for this elusive path to peace, while a thousand wars raged across the span…