The Sector That Will Grow Your Wealth… In Any Market
My investment ideas are based on companies that control solid resource assets. I mean oil, natural gas, uranium, gold, silver, copper and much more. These are real things, not vaporware.
The firms in my portfolios have not only great assets, but also great management and excellent business plans. These companies are building themselves over time and creating new wealth. Over the long haul, I’m not overly concerned about the companies on my list. When the smoke clears, they’ll be standing tall.
The End of Big Finance and Big Welfare-Warfare State
Let’s distill the problem. We live in an era — and I believe it’s the END of an era — when the West’s so-called “finance industry” grew far too large and is now collapsing. Same thing with the so-called “welfare state” and its companion “warfare state.” Big Finance is dying, as is Big Welfare.
Back in the 1960s, something like 15% of overall U.S. corporate profits came from the banking and finance side of the economy. By the early 2000s, something near 50% of corporate profits came from running money. That was, quite simply, too much of the economy devoted to finance.
Occupy the Resource Space
This issue of the collapsing “finance industry” gets back to a point I’ve made before, that finance — running money — isn’t what creates wealth.
You create wealth by digging or pumping something out of the ground. Then you refine it and process it, adding value along the way. Then you turn the product into a finished good that somebody else needs or wants. The idea of “finance” is OK to facilitate the foregoing, but not as an end in and of itself.
This line of thinking gets back to why I like the resource space. It’s why I pound the drum so hard for you to “occupy” the resource space, so to speak. Banks come and go — although many of them don’t go fast enough, in my view. But a good oil field or ore deposit is forever — well, almost forever, or at least until someone comes along to pump it or dig it out. Occupy that.
I’m inclined to think that the next financial revolution will bring competition to government-issued currencies. The next useful currencies will be backed by real assets — gold, silver, energy and more. So owning an interest in oil, uranium, precious metals and more will be like owning the “banks” of the future.
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