Hold on tight…

  • Insight AND advice
  • Don’t let them in
  • Foresight, not hindsight

It’s probably one of the finest hotels in the world.

The rooms are luxurious.

The food and service is first rate.

And the world’s great and famous (and infamous) choose to stay here when visiting Berlin.

Yet, for all its history, the Hotel Adlon in Berlin is now most famous for one single event — it’s where Michael Jackson dangled his nine-month-old son from a balcony in 2002.

But we’re here for another reason — to meet up with Jim Rickards for a three-day pow-wow involving colleagues from the US, the UK, Brazil, Argentina, France, Germany and China.

It all kicks off Tuesday morning local time. We’ll give you a summary of the first day tomorrow.

Until then…


Overnight, the Dow Jones Industrial Average gained 39.58 points, or 0.2%.

The S&P 500 fell 2.57 points, or 0.11%.

In Europe, the Euro Stoxx 50 index added 1.57 points, for a 0.05% gain. Meanwhile, the FTSE 100 fell 0.92%, and Germany’s DAX index lost 0.12%.

In Asian markets, Japan’s Nikkei 225 index is down 29.46 points, or 0.15%. China’s CSI 300 is down 0.78%.

In Australia, the S&P/ASX 200 is down 11.30 points, or 0.20%.

On the commodities markets, West Texas Intermediate crude oil is US$52.64 per barrel. Brent crude is US$55.58 per barrel.

Gold is US$1,162.89 (AU$1,550.82) per troy ounce. Silver is US$17.09 (AU$22.80) per troy ounce.

The Aussie dollar is worth 74.9 US cents.

Insight AND advice

A couple of days ago, an article appeared in Forbes with the headline: ‘5 Technologies that Should Make You Money in 2017’.

It goes on to list the five technologies. They are:

  • Intelligent Systems Technology
  • Interaction Technology
  • Small Software Technology
  • Sensor Analytics Technology
  • Cyber Security Technology

We’ll first say that there is nothing wrong with this list. But it’s hardly comprehensive.

In fact, if you ask a dozen tech experts to name their best technology opportunities for next year, you’ll likely end up with a wide variety of ideas in each list.

In this instance, it’s not that the ideas are bad; the bigger problem is that there isn’t any actionable information to go along with it.

We’re not even asking for specific stocks. Even a list of stocks in each of the given categories would be a good start. Instead, we get nothing.

Talk about a disappointment.

That’s what makes (if you’ll pardon the plug) Sam Volkering’s upcoming technology special event so interesting. He’ll explain exactly how investors can get the details of five specific stocks that Sam believes are set to revolutionise technology — and the world — in the years ahead.

It’s a fascinating insight. Sam’s outlook always is.

He eschews the drumbeat of doom-and-gloom. That doesn’t mean he thinks the global economy is going along swimmingly, or that governments and central bankers aren’t inflicting major damage.

He’s aware of all that, and he’s concerned about it too. However, he also knows that, more often than not, technology and innovation transcends often obscure and unfathomable macroeconomic woes.

That’s what makes Sam’s work such a bright beacon of hope. It also makes Sam’s investment advisories so compelling. He doesn’t just talk about macroeconomic events (he doesn’t talk about them at all!), and he typically doesn’t recommend speculating in the kind of ‘sensible’ investment ideas you’ll find elsewhere — both within Port Phillip Publishing and among our competitors.

Instead, Sam looks for the game-changers…the disrupters…the innovators and breakthrough merchants that are determined to do all they can to upset the way people and businesses do things — replacing it with something better.

That’s technology and innovation for you…or, to be precise, that’s game-changing technology and innovation.

Look, I really can’t do Sam’s work justice. I love the kind of technological advancements Sam writes about, but I know my limitations. That’s why I hired Sam in March 2013.

When I first interviewed him to come on board as our in-house tech guru, I knew he was the right person to take our technology analysis to a new level.

He hasn’t disappointed. And, this week, in a special event, he’ll show you exactly why now is the most exciting time to be alive in terms of technological advances — and the positive impact it will have on peoples’ lives for generations to come.

It’s a bold claim, but I believe Sam is right on the mark with his prophecy. For details of the upcoming special event, go here.

Don’t let them in

On the subject of technology, we frequently hear folks say that the government needs to ‘lead the way’ when it comes to innovation.

They’ll say that the government should subsidise one thing, support another, or provide tax breaks or incentives to something else.

It’s all a load of hokum.

When it comes to technology and innovation, the last people you want to involve are those in government.

Governments don’t have a clue when it comes to technology or innovation. If they did, they wouldn’t have poured billions of dollars of taxpayers’ money into the soon-to-be-redundant National Broadband Network (NBN).

Just when people in their droves realised they no longer needed fixed-line communications infrastructure — due to the growth and convenience of wireless technology — the government launched the NBN.

Then, in a fit of complete madness, the government decided it would do the complete opposite of sound business sense. Instead of starting the rollout in the most densely populated areas, allowing the NBN to bring as much revenue and cash flow into the business as possible, it started its rollout in some of Australia’s most sparsely populated areas.

As we’ve shown you previously, less than 5% of metropolitan Melbourne has access to NBN infrastructure. Yet there are thousands of acres of fields, home to cows and sheep, which could connect to the NBN tomorrow if they chose — if only there were humans who lived there who were able to do so.

However, don’t for a moment think that government stupidity ends there.

The Sydney Morning Herald reveals another feather that the government can stick in its cap when it comes to destroying competition, innovation, and entrepreneurship:

The Turnbull government will seek to introduce a new levy on telecommunications companies to help pay for the roll-out of the NBN in regional areas, a change it admits will lead to higher prices for internet consumers.

The move goes against the advice of the government’s own hand-picked expert panel, which warned such a levy “causes greater distortions than it is intended to remedy”.

Communications Minister Mitch Fifield announced on Monday that the government would legislate to create a new Regional Broadband Scheme that is estimated to raise $40 million a year. The Department of Communications has found the cost of the scheme would largely be passed on to consumers through higher prices.

The scheme would see NBN’s rival super-fast broadband networks pay a levy of $7.30 for each fixed-line connection, with the contribution indexed to increase each year. By 2022 the levy would rise to $8 per connection.

Never again let anyone in government say that they believe in promoting technology.

Never again let those in the technology industry beg for government support.

The government has no business being involved in anything to do with technology. Just as it has no business being involved in education or health.

As soon as the government gets involved, costs spiral out of control, competition disappears, and, eventually, the government becomes the dominant player in a decaying and backwards industry.

If you thought Australian broadband would improve due to government involvement, you were sorely mistaken…just as we predicted you would be.

Register now

Government out, private enterprise in. Remember to join Sam Volkering in this week’s special event here.

Foresight, not hindsight

Our old buddy from Money Morning Trader, Callum Newman, shot us another note this morning…purely to blow his own trumpet.

The trumpet worthy of blowing refers to the 29 November issue of Money Morning Trader. In that issue, Callum wrote:

Now here’s an example of why you need to be clear in your own mind whether you’re a trader or an investor, and on what timeframe you’re operating on. Here’s why: A stock can present a short-term opportunity, but be a bad long-term risk.

That’s the way I’m thinking about Origin Energy [ASX:ORG] right now, anyway. Origin is one of Australia’s largest utility companies, with an oil and gas exploration and production division as well. Long-term, both its electricity operations and energy businesses are at threat of major disruption. More on that in a second.

Right now, however, the chart is signalling a change in trend to the upside. Let’s bring up the chart…

chart image

Source: Optuma
Click to enlarge

Can you see how the two moving average lines have crossed over? The shorter average (blue line) crossing over the longer average (red line) is a useful signal. It’s bullish.

You can also see Origin is threatening to break out of the sideways pattern it has been in for almost the entire year.

The oil price is driving the recent momentum. There’s a strong correlation with Origin’s share price movement and oil. That’s why the stock paused yesterday. OPEC is due to meet this week to decide whether to cut production and prop up the oil price. The market’s unsure which way this is going to go.

However, these deals come and go. Fundamentally, over time, supply and demand drives the oil price. West Texas oil is currently around US$46 a barrel. I want to see a break above US$52 to get bullish on oil for the intermediate future.

Such a move in the oil price, if sustained, would give Origin some nice tailwinds that have been missing recently: stronger cash flows to reduce its debt, pay dividends, and swing it back into profit. Its LNG production is now up and running, and higher oil prices will take the LNG price up too. A lot of earnings growth could, and is forecast to, come from this sector of the business.

Since then, oil has gone on a tear, as OPEC and Russia agreed to production cuts. As for the current Origin Energy share price? Check out the chart below:

chart image

Source: Bloomberg
Click to enlarge

The arrow signals the date on which Callum profiled the stock.

Callum does a great job of spotting interesting investment ideas at Money Morning Trader. You can find out more about it here.

Just note that Money Morning Trader is different from most of our other services. It doesn’t publish precise investment recommendations. That’s not the point of it. Instead, it’s a hybrid of educational information on technical analysis, along with the profiling of stocks, indices or commodities that can help provide readers with a ‘teaching point’.

Origin Energy is one example of that.

On a personal note, I find many technical analysis teachings to be in the ‘Harry Hindsight’ category. That is, they’ll show you a technical setup after it’s happened, and then use the outcome to justify their rationale.

I call that ‘20/20 Hindsight’ trading.

Money Morning Trader is different. It looks at a setup as it’s happening, and then explains how it could play out. It means that, sometimes, the outcome won’t always play out as hoped. But that’s trading.

As I say, Money Morning Trader is a great service, and it’s a great way to get into trading at an entry level. Check it out here.

That’s all for today. I’ll be back tomorrow with details from the first day of the private Jim Rickards summit here in Berlin.