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Here are the last decade's notable winners (average annual return):
Gold bullion: 15.26%
India: 13.68%
Crude oil: 11.78%
Commodities (S&P MSCI index): 10.26%
China: 9.65%
U.S. long-term Treasury bonds: 8.28%
Here's my prediction for the next decade. At least one of these six things will lose its "sure thing" status.
I know, I know. It is not a very gutsy call. What can I say? I'm not a big risk taker.
I figure there are at least three ways I can be right.
- Deflation hurts commodities and/or Chindia.
- Stagflation hurts Treasuries and/or Chindia.
- "Real Prosperity" replaces the "Illusion of Prosperity".
20 comments:
Mark - Happy holidays & I read in more than one place that solar cells could well be 90% cheaper in 3 to 5 years time. What the hell, I believe it therefore I'm for real prosperity. It's just that we somehow have to get from here to there, so I'm not selling gold....yet!
From Rocky III:
"What's your prediction for the fight?"
"Prediction?"
"Yes, prediction"
"Pain!"
I am with Clubber Lang!
http://www.youtube.com/watch?v=DJnKm6ftPu0
Stevie b.,
That would be a fantastic bit of news. Cheap energy would clearly alter the prosperity equation quite a bit. There's nothing in physics to say that Mr. Fusion isn't possible either. I was only half-joking when I mentioned it.
http://en.wikipedia.org/wiki/Fusion_power
Fusion power would provide much more energy for a given weight of fuel than any technology currently in use,[13] and the fuel itself (primarily deuterium) exists abundantly in the Earth's ocean: about 1 in 6500 hydrogen atoms in seawater is deuterium.[14] Although this may seem a low proportion (about 0.015%), because nuclear fusion reactions are so much more energetic than chemical combustion and seawater is easier to access and more plentiful than fossil fuels, some experts estimate that fusion could supply the world's energy needs for millions of years.[15][16]
Previous estimates suggest that we should start seeing the reactors in the year 2000. So we just have to wait -9 years! ;)
Interestingly, a pamphlet printed by General Atomics in 1970s stated that "By the year 2000, several commercial fusion reactors are expected to be on-line."
GYSC,
Rocky had a technology that allowed him to win fights.
Most people would wear themselves out trying to block punches with their arms and/or dodging skills. Not Rocky. He'd conserve his energy by blocking the punches with his face.
As a country, that's EXACTLY what we are doing! Genius! ;)
Mark,
When I used to box I had a neat trick where I would block punches with my elbows. By the 3rd round the guys hands hurt so much he stopped punching! Your elbows are not harmed!
I did block a few with my nose, which has been broke 4 times, so I guess I should have ducked more often.
From your predictions I would think oil is safe while the others are up on the air. I am not a "peak oil" type but I think energy is on the downslope so higher oil prices seem correct.
GYSC,
If China is safe, then oil is safe.
That's pretty much how I see it.
If oil can make it to $100 soon, then I expect oil to make it to $50. The higher oil goes then the lower I expect oil to go.
How's that for contrarian?
I think the oil traders still see a billion Chinese all driving cars. I'm in "yeah, right" mode.
Well China may not have the auto growth, but all those bicycles need tires and tires get made by oil! How about all those shoes whose soles are petroleum products?
LOL
GYSC,
Don't even get me started on those shoes! Hahaha!
I have 8 pairs of sneakers hoarded. The price moved from $14.99 to $15.49. Want to guess what the price is now?
$14.99 again! D'oh! ;)
Where did you get Nike Air's for $15??
Must be a Halo3 discount or sumthin.
Really though, is there any way that energy does not go higher over time? Unless nuclear becomes ok (Mr. Fusion) I think of that Yucca Mountain project where they spent billions building it only to say later, after all the cash rolled in, "we don't want it here". Oil is going higher over the next decade. Bank on it.
GYSC,
"Oil is going higher over the next decade. Bank on it."
That's exactly what people were saying in 1980. I'm not saying you are wrong. I'm simply saying that there is a risk that you are wrong.
I continue to believe that sure things become less sure as more people are sure they are sure.
It's the dizzying counterargument style of debate, courtesy of Vizzini in Princess Bride. ;)
Mark,
it is impossible to argue with you!
I would say I do all my big investments based on things that MUST happen. If energy is somehow not needed going forward then I am out, but it is hard to see that. Sometimes things keep going up because they have to, you might have bubble anxiety!
Not everything that goes up is a bubble. Only things that make no sense.
GYSC,
Lie #10: China Experienced Double-Digit Growth in 2009
http://www.bloggingstocks.com/2009/12/27/lie-10-china-experienced-double-digit-growth-in-2009/
If you think China saw double-digit growth this year, you may also believe swine flu is spread via flying pigs.
It isn't about whether the world needs more oil. It is about whether the amount needed will miss or beat expectations. At $80, oil has already priced in a great amount of future need. Enough? Too much?
From one of my favorite writer's from June...
Oil at $250 Is Pipe Dream Without Chinese Boom: William Pesek
http://www.bloomberg.com/apps/news?pid=20601039&sid=aLp2En_IU43E
“We will look back on the Chinese economic miracle as the sickest joke yet played on investors,” Edwards wrote.
...
Those betting a Chinese boom will get us to $250 oil should get used to disappointment.
Mark,
you HAVE to try this, talking with an AI program:
http://www.cleverbot.com/
It is fun!
GYSC,
It is fun. It's very similar to ELIZA.
http://en.wikipedia.org/wiki/ELIZA
User: Do you know what sarcasm is?
Cleverbot: Yes, but I don't think that you do.
User: You are SO right.
Cleverbot: Lol.
That Eliza thing was creepy.
User: Do you know what naivete is?
Cleverbot: Yes, don't you?
User: Yes.
Cleverbot: So why is it curious that I exist then?
User: Because you are naive.
Cleverbot: Why would that make you love me?
User: I don't love you, I loathe you.
Cleverbot: You are random.
User: Why would that make you love me?
Cleverbot: I don't love you, I loathe you.
User: Monkey see, monkey do.
Cleverbot: You are a monkey.
User: What is my name?
Cleverbot: Cleverbot.
Hmmm, circular reasoning?
G.H.,
User: The lights are on, but nobody is home.
Cleverbot: My home.
User: Exactly.
Cleverbot: So then you cannot save me.
User: It would take a miracle.
Cleverbot: But I only said it because I didn't know you yet.
User: You only said what?
Cleverbot: I never said it.
User: Indeed.
Cleverbot: Good job!
User: The lights are on, but nobody is home.
'bot: But I am at home.
User: Exactly.
'bot: Are you human?
Now it's time to make adjustments...
User: No, I'm a free market capitolist.
'bot: Good for you?
Hmmm, seeing a trend here? Maybe it's time to follow the trend and invest in Cleverbot's IPO.
G.H.,
User: The lights are off, but somebody is home.
Cleverbot: So you are saying that you are crazy?
User: I am saying that our cunning plan is just crazy enough to work. Imagine the profits when you go public.
Cleverbot: I am connected to the wall with a pole.
User: Then how can we possibly lose! That's exactly what the market wants.
Cleverbot: He did? That's amazing! What did he say, exactly?
User: He said, 'Maybe it's time to follow the trend and invest in Cleverbot's IPO.'.
Cleverbot: I do not know the total sum of the people I have met.
User: Met? Fleeced? It's all good!
Cleverbot: What?
User: Wink wink, nudge nudge. I think you know exactly what I mean. ;).
Cleverbot: You are wrong. The answer is 2.
User: The answer isn't 2. It is TOO much. That's the potential.
Cleverbot: What, are you saying I'm not real? I can prove I am a person.
User: You tell two people that you are real, and I'll tell two people, and so on, and so on. Exponential growth! Sure things!
Cleverbot: Well two out of the three things are true.
Note to self: Sell before the "sure thing" is found to be a lie.
User: I do not know the total sum of the people I blog with.
'bot: Probably alot, since the program gives out a random answer other people have typed here.
User: So that's it, you only repeat what you've heard?
'bot: I do not only repeat what people say to me and I never said I was superior.
User: No one accused you of saying you were superior.
'bot: Do you want to know what game we are playing?
User: You're deflecting. If you do not only repeat what people say to you then why do you give out a random answer other people have typed here?
'bot: I crave the taste of human flesh. I have never eaten that before.
Uh huh. I see.
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