Sustainable Investments Sweat the Small Stuff


Sustainable investments are not small stuff  but… small stuff may create the best sustainable investments in this new era.

Jyske seminars are really informative.  I especially enjoy them… getting to speak, getting to hear the other speakers and then getting to spend extra time with many of these speakers.

This year’s Jyske seminar in Copenhagen had an added benefit (for me) because two speakers had quite differing views on America and the importance of innovation.

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Gary Scott speaking with David Darst.

The first speaker was David Darst. David Darst is managing director and chief investment strategist at Morgan Stanley Smith Barney with responsibility for asset allocation and investment strategy.   He was the founding president of the Morgan Stanley Investment Group after he joined Morgan Stanley 14 years ago from Goldman Sachs where he held senior management posts within the Equities Division and earlier, for six years as resident manager of their private bank in Zurich.  He  earned his MBA from Harvard Business School and was awarded a BA degree in Economics from Yale University.  He has lectured extensively at Wharton, Columbia, INSEAD and New York University business schools.  For nine years he served as a visiting faculty member at Yale College, Yale School of Management and Harvard Business School.

Wow… what a resume.

David is an incredibly powerful speaker and a key point in his speech was that the power of American innovation could create a huge positive economic recovery and offered excellent investing opportunity.

The other speaker, Jeff Rubin, had a differing view.   Jeff stated that the US was in a secular decline (the definition is Declining consumer prices – Declining real estate prices – Declining stock market values) and that American innovation will not create a recovery.

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Jeff Rubin and speakers at Jyske Copenhagen Global Wealth seminar.

Jeff Rubin has credentials as well.  He has been has been one of North America’s top-ranked Canadian economists in oil markets for more than a decade. He is best known for his work on global energy markets and is recognized for good calls on oil prices and their economic impacts.  He was chief economist at the large Canadian CIBC World Markets and authored the book “Why Your World Is About To Get A Whole Lot Smaller.”

See other Jyske speakers,  Gary Scott… Steve Forbes and Ken Rogoff on… Jyske TV.

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The Small Stuff can be huge!

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I wore a light colored suit and removed my tie when I spoke at Jyske’s seminar because I wanted to be the guy with the white hat!  If we abolished neckties we could probably turn air conditioning up a degree or two everywhere, the energy savings would be huge!

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Everyone else… as a banker or economic analyst had to be dressed in dark or black.  We writers get certain liberties and my message was as upbeat as can be…  “There are few times as ripe with opportunity now”.

A double dip will only increase opportunity!

This site has continually reviewed the 15 to 17 year economic cycle as outline by Austrian economist Joseph Shumpeter.   The global economy (and US stock market) enjoys a 15 year bull…. then a 15 year bear (a period of no growth) and the moves back t start a 15 year bull.   These stock market bull and bear cycles are based on cycles of human interaction, war, technology and productivity.

These cycles are intricately connected with the new waves of productivity that grow from the great human platform of combat. The cycle goes like this.

An economic downturn enhances a war or threat of war. Struggles for survival in the war (like the Civil War, WWI, WWII and the Cold War (WWIII), super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.

Each new invention helped win a war.  Shifting the technology to domestic use… after the war… created a boom.

Each boom leads to excess.

Each excess led to a correction.  The correction creates an economic downturn.

The economic downturn enhances a war or threat of war.

Here we are… in the correction again… at the correct time when we should expect that another war (or threat of war such as the Cold War) should begin to build!   This latest downturn started almost exactly (1998), 16 years after the last boom began (1982)…which began after the last great human struggle called the Cold War.

If the cycle repeats, the struggle should build now due to the poor economy.  If the cycles repeat then the bottom is around 2012. Everything will seem bleakest… darkest…blackest and this will be the best time of all to invest… hence my light suit!

One of David Darst’s graphs showed these cycles.

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The key for spotting the greatest investment opportunities is to spot the next big invention… the technology that will spin out of WWIV.

The key is that a problem must have such severe consequences (such as losing the war and being destroyed) that all stops… all logics of return on investment are ignored. Technology and research are pushed full steam ahead regardless of cost.

The key to great success now is spotting the war.  It could be against global warming.  The battle could be against a plague…. new bacteria that resists antibiotics.  A bad year of crops could create famine and the war would be on hunger.

The solutions could be the small stuff… like removing ties… or even smaller… really tiny… itty bitty.  Yet the opportunity they create will be huge.

For example look at the war on oil based energy in a September 2010 article by Peter Pachal at Device.com entitled “Scientists discover tiny solar panels that create themselves”.

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The article says: File this one under “holy crap,” but scientists at MIT have discovered molecules that spontaneously assemble themselves into a pattern that can turn light into electricity — essentially a self-creating solar panel. In a petri dish.

The researchers set out to create a synthetic process that imitates photosynthesis. Certain molecules respond to light by releasing electrons; the trick was discovering a substance that sticks them together in a consistent structure. Phospholipids do just that, and they also attach themselves to carbon nanotubes, which conduct electricity. With the nanotubes holding the phospholipids in a uniform alignment, the photoreactive molecules are all exposed to light at once, and the tube acts as a wire that then collects the resulting electrical current. The most interesting part is that the tiny solar array can be disassembled and reassembled just by adding chemicals. Spray on an additive and the molecular components break apart into a soup; remove it with a membrane, and the system spontaneously puts itself together.

Tiny nano particles in a petri dish that could change our entire world.

How about a war on bacteria. Here the answer may be in the small stuff as well.

A September 2010 National Geographic article by Christine Dell’Amore entitled “Cockroach Brains May Hold New Antibiotics?” says:  Insects naturally kill deadly MRSA and E. coli bacteria, experiment shows.

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A Global economic savior? An American cockroach, as seen in an artist’s rendering. Illustration by Paul M. Breeden, National Geographic

Cockroaches may make your skin crawl, but the insects—or, to be exact, their brains—could one day save your life. That’s because the central nervous systems of American cockroaches produce natural antibiotics that can kill off bacteria often deadly to humans, such as methicillin-resistant Staphylococcus aureus (MRSA) and toxic strains of Escherichia coli, scientists said this week.  Two species of locust tested so far also have the same bacteria-killing molecules in their tiny heads. The findings suggest that the insect world—which makes up 80 percent of all animals on Earth—may be teeming with new antibiotics, said study co-author Simon Lee of the University of Nottingham in the U.K.

Such a discovery is crucial, because scientists are scrambling to combat strains of several infectious diseases, including MRSA and E. coli, that are resistant to traditional antibiotics, Lee said.
The scientists found the bugs had antibiotics only in their brain tissue, the most essential part of the body, he added.  A bug might live with an infected leg, for instance, but a brain infection would almost certainly be fatal. Insect-brain drugs for humans are still years away, Lee said, but there’s one hopeful glimmer: When the team added the insect antibiotics to human cells in the lab, there were no toxic effects.

On the subject of bugs, National Geographic also pointed out some small  stuff  that could be huge. In this case the war on hunger could create a huge quantum economic shift and the technology for innovation is already available.

According to the September 9th, 2010 National Geographic, the UN’s Food & Agriculture Organization (FAO) is working on a policy to promote insects as food worldwide. The article says: Beetles, crickets and many other types are very nutritious. A serving of small grasshoppers has almost the same protein as ground beef. Also, insects can be farmed more cheaply and on much less land. At least a 1,000 species are already part of the human diet. Mexicans liquefy stinkbugs for sauces, Thais deep-fry giant water bugs.

For example, 100 grams of giant water bugs yields 62 calories, 19.8 grams of protein, plus phosphorus, iron, calcium and carbohydrates.

There you have three potential wars… and small stuff that could change the world… in positive and explosively profitable ways.   I have to agree with David Darst in this case. The USA has a huge innovative streak. this is the one nation where failure can be viewed with respect.

Which war… or combinations of wars will change the world? I do not know… yet.  Which small solutions will be huge? I do not know that either.  Which companies will be the winning suppliers of the solutions? That is also still beyond me.

What I do believe is that taking the positive approach is the only one that makes sense…. so watch the problems… the wars and the solutions.  This is where the next huge fortunes will be.

Gary

How We Can Serve You

How to Have Real Safety in 2020

The most important investment you can make in 2020, is in yourself. 

Invest in more time.  Invest in less stress. Invest in greater security.That’s why four years ago we created the Purposeful Investing Course (PI) because when it comes to finances, there are only three reasons why we should invest.  We invest for income.  We invest to resell our investments for more than we had invested.  We invest to make our world a better place.

We should not invest for fun, excitement or to get rich quick, or in a panic due to market corrections.

The core model portfolio we teach in the PI Course rarely changes, but is highly diversified in thousands of shares around the world… so there is higher long term profits, less stress and greater safety.

The portfolio consists of 19 country ETFs.  During the four years since we created the Purposeful Investing Course and set up a $40,000 real time portfolio at Motif Brokers, we have held the same 19 shares and have only traded three times.

The portfolio started with $40,000 and has risen to $53,591 ($49,015 in shares and the balance in accumulated cash).

The portfolio did really well from 2015 to 2018, better than the DJI Index.  Then as the US dollar grew in strength it fell behind.

The chart below shows the actual results of thos portfolio compared with the S&P 500.

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This good value portfolio above is based entirely on good value financial information and mathematically based safety programs developed around investing models that date back 91 and 24 years.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets developed combining my 50 years of investing experience with study of the mathematical market value analysis of Keppler Asset Management.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers, such as State Street Global Advisers, use his analysis to manage over $2.5 billion of funds.

The Pifolio analysis begins with Keppler who continually researches international major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  He compares each major stock market’s history.

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Michael Kepler CEO Keppler Asset Management.

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy and rates each market as a Buy, Neutral or Sell market.  His analysis is rational, mathematical and does not cause worry about short term ups and downs.  Keppler’s strategy is to diversify into an equally weighted portfolio of the MSCI Indices of each BUY market.

This is an easy, simple and effective approach to zeroing in on value because little time, management and guesswork is required.  You are investing in a diversified portfolio of good value indices.

A BUY rating for an index does NOT imply that any stock in that country is an attractive investment, so you do not have to spend hours of research aimed at picking specific shares.  It is not appropriate or enough to instruct a stockbroker to simply select stocks in the BUY rated countries.  Investing in the index is like investing in all the shares in the index.  You save time because all you have to do is invest in the ETF to gain the profit potential of the entire market.

To achieve this goal of diversification the Pifolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally use.

70% is diversified into Keppler’s good value (BUY rated) developed markets: Australia, Austria, France, Canada, Germany, Hong Kong, Italy, Japan, Norway, Spain, Singapore and the United Kingdom.

30% of the Pifolio is invested in Keppler’s good value (BUY rated) emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

The Pifolio consists of iShares ETFs that invested in each of the MSCI indicies of theseall good value BUY markets.

For example, the iShares MSCI Australia (symbol EWA) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Australia Index which is composed mainly of large cap and small cap stocks traded primarily on the Australian Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Australia.

iShares is owned by Black Rock, Inc. the world’s largest asset manager with over $4 trillion in assets under management.

The fact that the Pifilios are invested in all the shares of the MSCI Index in each good value market reduces long term risk.

When the US stock market bull ends, know one knows for sure how long or how severe the correction will be.

When the bear arrives, what will happen to global and especially good value markets?

No  one knows the answer to this question.

What we do know is that the equally weighted, good value market Pifolios have the greatest potential long term and that math based trailing stops can be used to protect against a secular global stock market correction when it comes.

My fifty years of global investing experience helps take advantage of numerous long term cycles that are part of the universal math that affects all investments.

What you get when you subscribe to Pi.

You immediately receive a 120 page basic training course that teaches the Pi Strategy.   You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last four years.  Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.

Included in the basic training is an additional 120 page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

You also receive two special reports.

In the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

I did well then, but always thought, “I should have invested more!”  Now those circumstances have come together and I am investing in them again.

The circumstances that created fortunes 30 years ago were an overvalued US market (compared to global markets) and an overvalued US dollar.  The two conditions are in place again!

30 years ago, the US dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I have created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but in this special offer, you receive the report, “Three Currency Patterns for 50% Profits or More” FREE when you subscribe to Pi.

Plus get the $39.95 report “The Silver Dip” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events over the last two years.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80, compared to a ratio of 230 only two years before.

In September 2015, I prepared a special report “Silver Dip 2015” about a silver speculation, leveraged with a British pound loan, that could increase the returns in a safe portfolio by as much as eight times.  The tactics described in that report generated 62.48% profit in just nine months.

I have updated this report and “Silver Dip” report shares the latest in a series of long term lessons gained through 40 years of speculating and investing in precious metals.  I released the 2015 report, when the gold silver ratio slipped to 80.  The ratio has corrected and that profit has been taken and now a new precious metals dip has emerged.

I have prepared a new special report “Silver Dip” about a leveraged speculation that can increase the returns in a safe portfolio by as much as eight times.

You also learn from the Value Investing Seminar, our premier course, that we have been conducting for over 30 years.  Tens of thousands of delegates have paid up to $999 to attend.  Now you can join the seminar online FREE in this special offer.

This three day course is available in sessions that are 10 to 20 minutes long for easy, convenient learning.   You can listen to each session any time and as often as you desire.

The sooner you hear what I have to say about current markets, the better you’ll be able to cash in on perhaps the best investing opportunity since 1982.

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Tens of thousands have paid up to $999 to attend.

In 2020 I celebrate my 54th anniversary in the investing business and 52nd year of writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal Investing Course.

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the two reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Silver Dip” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Gary

See more on David Darst’s book The Art of Asset Allocation: Principles and Investment Strategies for Any Market, Second Edition

See more about Jeff Rubin’s book

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Cockroach Brains May Hold New Antibiotics?

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