I hope you enjoyed my notes from Doug’s talk! He is always insightful and entertaining—a great combination. 🙂
Rather than continually giving you the blow-by-blow details of each and every speaker who presented (which would be impossible…I would be at this for months!), today I want to give you something I hope you find equally if not more useful—my “Top Ten” takeaways and insights from the conference.
(And of course I will do a few more in-depth reports of my favorite speakers in the days and weeks to come!)
Also, if you are interested in hearing and even seeing the speakers for yourself, you can purchase the audio and/or video from the entire conference here…it’s only $99 for all of the .mp3’s. (← and no, that’s not an affiliate link, although at some point I would like to be as their conference was fantastic and I’m happy to recommend it!)
So without further ado, let me dive right in:
10. Everyone agrees on the importance of owning physical gold
And I do mean everyone. Now it could just be this crowd, of course…Bill Bonner, founder of Agora, is known for believing in Austrian economics, and of course sound money is at the heart of Austrian economics.
(Yours truly believes in Austrian economics as well…it is the only economics that has ever made sense to me, and when I discovered it, my wealth increased tremendously!)
Still, every single speaker spoke of the need to own physical gold (although the percentages differed…that is something you will need to determine for your own personal situation).
(Shameless plug…if you haven’t opened an account yet and are interested in the easiest way to store your metals overseas and take delivery of them whenever and wherever you choose, I highly recommend checking out the Hard Assets Alliance, of which Kung Fu Finance is a Founding Member and I personally have opened an account).
9. Most attendees had libertarian leanings, believing in free markets and free minds.
Obviously this is a gross generalization as I didn’t survey each and every attendee, but of everyone I spoke to (and I spoke with a LOT of people…I love people and am quite social that way), the vast majority had what I would call “libertarian leanings”.
This is just an interesting observation and I don’t mean to imply cause and effect, but it did raise the question for me — are wealthy people more Libertarian-minded or are Libertarians more wealthy? Or neither?
I plan on attending Libertopia this Fall (please join me!) so maybe I will have more to report on then.
8. As a corollary to the above statement, however, Barry Ritholtz of “The Big Picture” instructed all of us, no matter what our political leanings may be, to keep politics OUT of our investing or face the dire consequences.
In 2003, Barry’s Democratic friends warned him to stay out of the market or else…because the “poorly designed” Bush tax cuts were going to be terrible for the market:
But how did that “political trade” work out?
Not so well…those who stayed out of the market due to the “poorly designed Bush tax cuts” missed out on a 90% return over 4 years! Ouch.
Or on the other hand, more recently in 2009, Barry’s Republican friends told him…
But at that point FASB 157 was put into effect (Financial Accounting Standards Board statement that created three levels of assets to help investors and regulators understand how accurate a given company’s asset estimates were), we had ZIRP (Zero Interest Rate Policy), we had QE (Quantitative Easing) and we had very oversold markets…so what happened?
Once again, the “political trader” who thought “Obama will be terrible for the markets” missed the best rally in a generation – up 108% over 36 months!
So whether you prefer Romney or Obama or someone else entirely, keep them out of your investment thesis…because according to Barry, “they are a luxurious indulgence you can’t afford.”
(By the way, Barry gave two outstanding presentations that I will do more detailed write-ups on, and I highly recommend you check out his blog at “The Big Picture” if you don’t already read it.)
7. Don’t forget to analyze the cost of NOT acting.
Juan Enriquez, the Chairman and CEO of Biotechonomy and Managing Director of Excel Venture Management gave a surprisingly great presentation on the cost of not acting.
I say “surprisingly”, because I thought he was going to just hype up “big pharma” and the importance of drugs, but it wasn’t like that at all. Instead, he gave a thoughtful and well-researched talk on how we are falling way behind other countries because of the horrific regulatory burden imposed on the biotechnology and pharmaceutical industries by the FDA.
Most people believe the FDA’s mission is “to protect you”, and most people believe that Pharma’s mission is “to make a profit”.
And “to protect us”, the FDA has become more and more stringent…but at what cost? Many drugs get delayed or simply do not even get tested, and many “Pharma” companies have simply given up or are forced to spend 2x as much on sales and marketing as they do on research and development…which reinforces the belief that they are only interested in “making a profit” (and in all honesty, they are interested in “making a profit”, yes, but in “making a profit by saving lives“).
Juan is worried about the cost of not acting. Why haven’t we cured cancer yet? Why is there still no malaria vaccine? There have been simply staggering advances made in the past few years, and both of those are well within our reach, but a new drug now costs over $1 billion to come to market. He told one story of an important beta blocker drug that was delayed 7 years before finally being allowed to come to market, and by conservative estimates, that delay may have killed over 119,000 people.
Anyway, his point was that we never hear of the cost of not acting…we only hear those awful commercials, “Have you been hurt by DrugXYZ? Be sure to call your lawyer…”.
So, what does this have to do with investing?
I worry about this for you, dear grasshopper, all the time. I worry that you read these articles and think to yourself, “oh, that’s interesting!”, and then don’t actually act on the information. It is always scary to dive into a new investment, but I encourage you to consider the cost of not acting…what do you stand to lose?
6. Now for a truly contrarian pick….Marc Faber recommends PIGS equities!
I must admit, this is not something I’ve considered recently. I don’t wake up each morning thinking, “Gee, I think I’ll buy some Greek stocks today!”.
And yet, according to Marc Faber, many Portuguese, Spanish, Greek, and Italian equities are selling for well below their March 2009 lows. This is a true contrarian play, and if you have the guts to “buy low” you can truly find some great deals.
5. We suck as investors. (And can therefore use all of the financial education help we can get!)
Louis Petrossi from the Wealth Research Institute had some interesting (yet sad) facts…
Out of every 100 people at retirement age:
- Only 2 are financially independent
- 23 must continue working
- 75 must depend on relatives, friends, or charity
Plus, we have 46 million people on foodstamps, and a full 60% of the middle class will outlive their money.
Bill Bonner had a scary statistic to share, too…every baby born in the United States owes $600,000 the minute they exit the womb.
So what can we do about this?
Obviously I believe the answer is becoming more financially educated, and Barry Ritholz agrees…he did a great presentation on the “Top Ten Mistakes Investors Make” which I highly encourage you to read—he’s a really smart guy.
- Excess Fees
- Reaching for Yield
- You Are Your Own Worst Enemy
- Asset Allocation vs. Stock Picking
- Passive vs. Active Management
- Mutual Funds vs. ETFs
- Neglecting the Long Cycle
- Cognitive Deficits
- Past Performance vs. Future Results
- Not Getting What You Pay For
4. Resource company presentations feature a wealth of information.
Yes, they are sales pitches, but especially if you are interested in investing in this sector you can learn a tremendous amount.
I love learning from other investors…people much smarter than I am ask all sorts of fantastic questions that would not even occur to me, and I benefit from the question and the answer, and you will, too!
3. You can learn as much (or more…) in the bar as you do in the sessions.
This one’s self-explanatory…hit the bar and enjoy some great conversations with fascinating people — what’s not to love?
It’s probably no secret by now that I love the bar. 🙂 I love chatting with people over a cocktail (or two…), and apparently I’m not the only one, which is great!
I think I learn as much or more from my bar conversations as I do in the sessions, and I love that. For example, I sat down with Doug Clayton, Managing Partner of Leopard Capital and frontier markets investor for a drink and had a fantastic conversation about Cambodia and Mongolia, and also sat down with the man himself, Bill Bonner, for a solid hour, and had another fantastic conversation about all things investing/Argentina/business/life…what an amazing man.
So hit the bar! I’ll see you there…
2. You MUST have a plan…no matter how much money you have.
There are just far too many good ideas. Even if you had $50,000,000, you would be hard-pressed to spread that around to all of the possible options you could invest in. (Well, maybe that wouldn’t be too difficult, but for the rest of us mortals we must pick and choose and focus!).
You could, for example, in no particular order…
Give Rick Rule $200,000 for his new partnership (he’s asking $100,000, but realistically the people who “love him the most” will get into the partnership), or open up an account with Sprott Global, or give some money to Doug Clayton to invest in frontier markets, or do some currency speculation (or even just simple currency diversification at Everbank!), or buy a big chunk of physical gold/silver, or invest in dividend-paying stocks, or an oil and gas MLP, or in real estate, or in foreign (maybe PIGS?) equities….that $50,000,000 goes pretty fast!
So you must have a plan…one that works and makes sense for YOU.
1. People matter.
If you’re a serious investor, or want to become a more serious investor, you need to get yourself to a conference and meet people in person. I’ve written about the importance of this before, and I stand by it — it’s so important to meet people in person and your learning (and earning!) will improve tremendously.
Not only will you learn from the speakers (it’s a proven fact that you will retain more than 10x the information from live-interaction learning than you will from simply reading), but you will also learn from other investors and hopefully form lifelong friendships and relationships.
Speaking of conferences…
I am attending the next Casey Conference, Navigating the Politicized Economy, in beautiful Carlsbad, California (my home state) this September. I would absolutely love to meet you in person (and buy you a drink at the bar…) so I hope you will join me!
I hope to see you there…
Please let me know what you think of my top ten takeaways in the comments! And thank you as always for reading…I truly appreciate it.
To your financial success,
— Kung Fu Girl