Agora investors not sure where to jump next
Posted on 21 July 2010 with 2 comments from readers
The 11th annual Agora Financial Investment Symposium opened in Vancouver yesterday. These investors are mainly from North America, although 29 countries are represented. They seem a bit confused by the stock market rally and what to do next.
However, their enthusiasm for gold since the last symposium a year ago has been well rewarded. Then there was even one unpopular speaker who forecast a fall in the price of gold and silver. They went up of course.
Market rally up?
Stock markets also rallied rather against the expectations of the symposium a year ago. Wall Street veteran Barry Ritholtz who correctly called the rally at the event last year therefore got considerable attention.
He said the rally had been long but in strength nothing more than historical precedent would predict. His forecast is now for a 25 to 30 per cent correction over the next 12 months as a part of a long secular bear market that started in 2000 and still has five to six years to play out.
These years will be characterized by a volatile trading range, he maintains, and money can be made trading this volatility. On the other hand, Agora investors seem keen to look abroad for better performance and diversification away from the US dollar. They are even curious about Dubai and the UAE,
They are also worried that the US will impose capital controls at some point that will prevent them getting their dollars out of the system before a crisis in fiat currencies. That might be devaluation, inflation or a bond market collapse, or some unfortunate combination of the three.
IOUSA
Agora Financial Executive Publisher Addison Wiggin introduced the former US Comptroller General David Walker whose barnstorming presentation outlined the extent of US indebtedness. Partly thanks to the film made by Addison, IOUSA, which featured Mr Walker, this problem is now better understood. Not that anything much is actually being done about it.
Another Agora star Chris Mayer, whose newsletter is the best read, highlighted the advantage of diversification through acquiring stocks with overseas interests or actual foreign stocks. He likes Emaar Properties.
But Agora investors are wedded to their alternative investment creed with a contrarian focus on commodities such as oil and gold and agriculture. They still resolutely hold exploration stocks – perhaps a wise judgement if inflation gets a grip of commodities sometime soon.
And of course, the UAE is a play on oil. That is what makes its bombed out stock markets of interest for recovery prospects.
Most of the audience is around retirement age. Some Americans like to do their own investment thinking and many of the Agora investors would easily cut it running a hedge fund. Their constant search for a new direction is highly praiseworthy, and it will be significant if anything really new emerges this week. Watch this space!
2 Comments posted by readers:
Thanks for keeping us well informed regarding the events at the Agora conference, Peter!
Not sure where to go? Go with 20% gold, 10% AT&T (dividend & an essential service), 10% Verizon (same), 20% IBM (very near artificial intelligence type web search breakthrough), 10% ConocoPhillips (oil,gas and dividend), 10% Exxon Mobil (same), and 20% cash. I own no stock.
Or you can buy 1 or 2 year, FDIC insured ($250,000 PER BANK limit) certificates of deposit, and get a return about equil to inflation. I would not go out more than 2 years on the CDs. Inflation could become a problem by then. Forget the 5 and 7 year ones. I don’t expect it, but inflation could be rampant by then, in which case, you will get killed. You can’t lose money with FDIC insured CDs. And a small check beats no check, when you give a bank all your cash to use for free sitting in a checking account. Shop the Internet for the highest CD rates in your area to help local businesses. Wall Street never did you any favors.