Eliminating your greatest investing enemy

Wednesday, 28 November 2018
Melbourne, Australia
By Bernd Struben

  • Why the world is rethinking this four-letter word
  • ‘Grandstanding Greens Leader Suspended from Parliament’’

As an investor, bias is one of your greatest enemies.

Staying out of Chinese or German stocks because you prefer to support Australian companies, for example, could see you miss out on big gains.

Or maybe you believe RBA Governor Philip Lowe won’t raise interest rates anytime soon because he said he wouldn’t…and you trust him. That biased faith could see you invest in a real estate investment trust (REIT) towards the top of the price cycle.

Shunning ‘pot stocks’ because you believe the industry is peddling an immoral drug is another biased investment decision. One that also means shunning the triple digits gains some of the top pot stocks have been making.

(If you haven’t checked out Sam Volkering’s latest pot stock recommendation, you can find that here.)

But perhaps the biggest bias infecting investors and analysts alike today relates to Donald Trump. There’s even a name for it, ‘Trump Derangement Syndrome’.

Here’s how the Urban Dictionary sums it up:

Trump Derangement Syndrome (TDS) is a mental condition in which a person has been driven effectively insane due to their dislike of Donald Trump, to the point at which they will abandon all logic and reason.

Now I’m not sure who came up with TDS. As best I can tell it dates back to the Bush years, when someone came up with BDS — Bush Derangement Syndrome.

(If you’ve got the inside scoop here, drop us a line at letters@portphillipinsider.com.au.)

While the term itself is not meant to be taken too seriously, TDS is affecting the advice you’re getting from some of the biggest names in economics and finance.

In your 15 November issue I brought up Joseph Stiglitz.

Stiglitz was awarded the Nobel Prize in economics. And he believes there’s a better than even chance the US will lead the world into a full-blown trade war. One he’s certain will see American workers lose out.

While I think Trump’s about to change tack and settle the trade disputes, Stiglitz may be right.

But it also looks suspiciously like he has an advanced case of TDS.

As quoted by the The Australian Financial Review Stiglitz said:

You don’t realise there is a lot of stupidity in the world. It’s just beginning to sink in that we are going to go to a trade war of a serious proportion…

The [US] business community are just celebrating their tax cuts to billionaires and corporations. It is unbelievable selfishness that they are willing to overlook misogyny, racism and bigotry to get more money in their pocket.’

It’s a recurring theme for the Nobel Prize winner.

Stiglitz visited Australia last week to receive the Sydney Peace Prize. And he warned Aussies not to follow the US economic model or we ‘will get bad outcomes’.

As reported by The Sydney Morning Herald:

Professor Stiglitz says many Republicans he knows regret what they’ve done for the past three decades.

“By that I mean many of the things they did set the stage for Trump. The vast majority of the Republican establishment are virulently against Trump.

“They believe in open markets, they believe in climate change, all these things but because they have been playing politics on all these issues, things have come home to bite them. And the party’s been taken over by an extremist.’

Stiglitz, I dare say, is likely among the millions of Americans calling for House Democrats to move forward with proceedings to impeach Trump. And if he’s right, the vast majority of Republicans just might back them.

As I wrote yesterday, the House Democrats are mostly laying low on the impeachment front for now. But 2019 may be a different story.

This editorial comes from USA Today:

The law won’t stop Donald Trump.

And a historic rejection at the polls just served to embolden him.

He must be checked by the only option left to the American people — impeachment.

The day after Americans showed up to vote in numbers not seen for a midterm election in over 100 years, to deliver Republicans their worst House losses since Watergate, Trump promptly revealed his contempt for both the Constitution and the American people…

America cannot bet our democracy on guys who are willing to work for Donald Trump — or expect one investigation to contain the overwhelming rot of his administration.’

Jason Stevenson, editor of Gold & Commodities Stock Trader, has been keeping a close eye on the growing momentum to impeach Trump. And he warns that even if the impeachment proceedings prove unsuccessful, they could send US and global stock markets into a tail spin.

In his new special report, published yesterday, he details the risks to your investments. And he highlights three ‘shock stocks’ he believes could rocket higher on investor uncertainty.

Find out the full story here.

Now a look at the markets…

Overnight, the Dow Jones Industrial Average was up 108.49 points, or 0.44%.

The S&P 500 gained 8.72 points, or 0.33%.

In Europe the Euro Stoxx 50 index finished down 6.29 points, or 0.20%. Meanwhile, the FTSE 100 fell 0.27%, and Germany’s DAX closed down 45.61 points, or 0.40%.

In Asian markets, Japan’s Nikkei 225 is up 250.65 points, or 1.14%. China’s CSI 300 is up 1.24%.

In Australia, the S&P/ASX 200 is down 4.18 points, or 0.07%.

On the commodities markets, West Texas Intermediate crude oil is US$52.03 per barrel. Brent crude is US$60.21 per barrel.

Turning to gold, the yellow metal is trading for US$1,214.16 (AU$1,678.87) per troy ounce. Silver is US$14.15 (AU$19.57) per troy ounce.

One bitcoin is worth US$3,786.24. Following heavy recent falls, that puts bitcoin back up 2.8% overnight. What can we expect next? You can stay atop all the latest crypto investing insights here.

The Aussie dollar is worth 72.32 US cents.

Why the world is rethinking this four-letter word

There are a lot of four-letter words out there I’m not allowed to print.

Amusingly, most every one of them revolves around the human anatomy. A bit of our Puritanical roots on display.

But I’m not talking about those kinds of words.

I’m talking about the word ‘nuke’. Not as in the kind you load into a warhead with hopes of incinerating millions of your fellows. As in nuclear energy.

With the UN driving fears of runaway global temperatures, more nations are planning to build nuclear plants. And the countries who have already invested in them are keeping them online for longer than planned.

Nuclear plants, after all, emit virtually no carbon.

In Europe, France leads the way. It gets about 75% of its electricity from nuclear energy.

Little wonder then that the French can sit on their high horse and demand other countries do more to reduce their carbon footprints.

France was planning to wean itself of nuclear power. But the AP reports that French President Emmanuel Macron now says the nation will move more slowly than promised to cap the amount of energy it derives from nuclear energy.

Why?

Public discontent over high energy prices and the desire to keep a lid on greenhouse gas emissions, of course.

Sound familiar?

Nonetheless, Australia still maintains its ban on all forms of nuclear power. That’s despite Australia holding an estimated 33% of the world’s uranium deposits. Along with some of the world’s most productive uranium miners.

When Scott Morrison said he’d consider lifting the ban on nuclear power last month, the opposition was quick to voice their outrage.

You can see Bill Shorten’s tweet below:



chart image

Source: Twitter
Click to enlarge

Julie Bishop raised the issue again this week at a conference in Sydney. The AAP reported that Bishop fears Australians are losing their ability to talk about difficult topics.

She added that even having a discussion on nuclear power, given the predicted impact on climate change is impossible. ‘We cannot even raise it in an enquiry. It’s automatically off the table. As a former science minister, I find that utterly frustrating. Have a debate; have a discussion.

Whether Australia sees the light of day on nuclear power is fairly inconsequential for the uranium market, and the companies that mine it. Just as we produce only a tiny fraction of global emissions, we also demand only a tiny fraction of the global energy supply.

India, with 1.3 billion people and growing — is a different story. And India is planning a major expansion of its nuclear power capabilities. Both the US and Russia have plans to increase their nuclear capacities as well.

Then there’s China.

Here’s what colleague Greg Canavan writes about China in his research paper, ‘Element U’:

Beijing has allocated $2.4 trillion to expand its nuclear power generation by 6,600%.

There are 36 operational nuclear reactors today. Each one generating clean, green electricity. But China isn’t stopping there. There’s another 20 reactors under construction…and more than 100 planned.

In ‘Element U’ Greg details why he expects global demand for uranium to soar over the next few years. And he highlights three tiny energy stocks that could see 10-nagger gains far sooner than that.

You can get all the details from Greg by clicking here.

Now before signing off, don’t forget to check out the latest shenanigans in Canberra from The Australian Tribune:

‘Grandstanding Greens Leader Suspended from Parliament’

Perhaps Greens leader Richard Di Natale is still smarting from the numerous allegations of sexual harassment and misconduct levelled at his own party in recent weeks.

Or perhaps he was just playing to the politically correct brigade that makes up his core supporters.

Regardless of the motivations for his ugly outburst, he refused to…’

If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.

And it’s absolutely free.

Sign up here to get The Australian Tribune delivered free to your inbox five days per week.

You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.

Cheers,
Bernd