Tim Price was in the Capital and Conflict studio yesterday with Paul Rodriguez from thinktrading.com. Both men brought charts. We talked about the S&P 500, the FTSE, and Apple. Traders will enjoy the show.
I managed to ask Tim and Paul several of the questions readers have emailed in, about gold, asset allocation and zero interest rates. It was a long but quite productive conversation. Tim also updated us on the progress of his book, The War on Cash. That’s coming soon.
By the way, if you can’t listen to these shows, I’m having them transcribed for your reading pleasure. If you’re listening on iTunes, make sure you rate the podcast and give us feedback. You can also subscribe to it there, so that you’ll be notified every time a new episode is published.
‘No new cold war’, says White House
Either the White House press secretary doesn’t know what he’s talking about, or he hasn’t read the latest issue of MoneyWeek. White House press secretary Josh Earnest downplayed a report of Russian warplanes ‘buzzing’ an American aircraft carrier. The USS Ronald Reagan was conducting a joint exercise with South Korean forces in the Sea of Japan when Russian warplanes flew nearby.
Unlike the American ‘incursion’ into China’s self-proclaimed territorial waters in the South China Sea earlier this week, the White House says the Russians were just playing around in international waters and international air space. In other words, “nothing to see here, move along”.
Begging to differ with the secretary, the Russians are on the front foot all over the world. Perhaps they’re just playing catch-up with a decade (or more) of American intervention all over the planet. But any time you take on an American aircraft carrier – a floating island of weapons that packs a greater military punch than most countries – you’re raising the stakes.
The MoneyWeek cover story is about the new global arms race
It lists six defence stocks to buy now. The premise is that the contest for global power is military as well as economic. Not all investors will be pleased with the theme. Anytime I’ve written about weapons makers before, I get one or two readers taking me to task for supporting death and destruction. But look at the chart below.
A chart is only as it’s good as its starting date. I picked the March 2009 low to compare a US-listed defence stock ETF (red) with the S&P 500 (black). The performance race is not even close, as you can see from the chart. This is one of those tawdry little secrets of the last few years: while the press fixates on quantitative easing (QE), the defence industry has been cleaning up as the world becomes more dangerous in an era of monetary instability.
Interestingly enough, only one of the stocks recommended in the MoneyWeek cover story is a holding in the US-listed ETF. That’s good news for British investors who are looking to add defence stocks to their portfolio. And while I’m on the subject of the magazine, one more note.
On page seven, there’s a short note about soaring global lithium use. No stocks are recommended. But I reckon this is a story John Stepek will want to follow up on when he gets back. John believes that that the world is on the brink of a great shift away from fossil fuels to better and renewable technology.
Editor’s Note: We have a new article called 8 Lithium stocks to buy now on our sister publication Exponential Investor. It also includes an exhaustive guide on what is lithium and investing options around it. Check it out.
Lithium will play a huge part in that if he’s right
On that subject, exciting news from researchers at the University of Cambridge. Science could be on the verge of a new design for the ‘ultimate battery’, according to a report at phys.org. According to the report: “Scientists have developed a working laboratory demonstrator of a lithium-oxygen battery which has very high energy density, is more than 90% efficient, and, to date, can be recharged more than 2,000 times, showing how several of the problems holding back the development of these devices could be solved.”
The science of it all, frankly, is beyond me (and beyond the scope of today’s Capital and Conflict). But in our modern age, any improvement in battery technology ought to lead to an improvement in our quality of life. This is why my co-editor Nick O’Connor is headed off to California in a few weeks to a technology conference; to hear more on these stories directly from the scientists at the coal-face of innovation. And, of course, to figure out how you can profit as an investor.
Nick, by the way, will be back next week. I’m off to America to do American things.
Category: Geopolitics