A handover doesn’t mean it’s over

Today is my last day as your editor of Capital & Conflict. I’ve been here since February 2017. Let me know what you think of my scribbles by emailing nickolai@southbankresearch.com.

But don’t worry, I’m not leaving you completely. Just moving over to Southbank Investment Daily. That’s another free newsletter. But only subscribers to any paid Southbank Investment Research product get it each day.

The idea of SID, as we call it, is to create a community of Southbank Investment Research’s subscribers. It’ll be my job to make our readers realise they’ve joined a research firm with some extraordinary brainpower behind it.

A team of traders based in the US and UK. Crypto-specialists, trends and cycles experts, famous value investors and fund managers, chartists and technical analysts, energy and resources insiders…

And that’s just Southbank Investment Research’s immediate editorial team.

Factor in our partners around the world and things get truly remarkable.

The thing is, this business doesn’t make sense to most people. They don’t understand what we do. That’s a pain in the neck according to our publisher Nick O’Connor. New employees and potential partners find our business mystifying. Perhaps because it’s so simple.

We write interesting and useful things to you each day, obligation free. There’s no external advertising in Capital & Conflict, so we don’t generate any external revenue from what we send you.

We also publish another free newsletter called Exponential Investor. You can sign up here. It’s about the coming booms that can make you rich.

The two free newsletters, we call them e-letters, are a massive expense for the business. It costs us a lot to find people like you in the first place.

Once we do find you, we have to deliver something of value for free each morning. As one reader told me in person at our conference in October 2017, “It’s just what I like to read first thing over a cup of coffee.”

And that means my deadline is 9am each morning, which can make things a little hectic. (It’s 8.46 as I do a final read through.) But it’s only a problem if we don’t have interesting ideas to present to you. And that would be a very big problem indeed. Because it’s all we do. Send you ideas.

Once you realise our ideas are valuable, you might just be willing to pay for more of them. Conveniently, if we want to tell you how to turn our ideas into precise actions to take, the regulators require us to have a commercial relationship with you. Not that we wouldn’t charge you for our best ideas anyway.

But the point is, once you’re our customer instead of just our reader, things change. There are all sorts of new possibilities in what we send you.

We can tell you which stocks to buy and sell, how to escape market turmoil, or even profit from it, what’s about to happen in the world of geopolitics, technology revolutions, and anything else we think is useful to you. Sometimes, elite fund managers and traders are willing to share their trading strategies.

Put it all together and that’s what makes the business work. We’re taking a punt on the idea that you’ll like us. Enough to pay us for our ideas, eventually. Once you get to know us through Capital & Conflict and Exponential Investor – the faces of the publishing company Southbank Investment Research and all its other publications.

And once you’re one of us, we hope you’ll find our ideas profitable and useful. Because if you don’t, you’ll ignore us. Or leave.

You might notice we offer some extraordinary refund policies to go with any sales. And I can tell you, people make use of them. Some people hate what we write.

But often, those are our best customers too. Some people like to be challenged. To have to think. People like those you’ll find in the editorial team at Southbank Investment Research. Which is why we find customers and other editors who disagree with us a good thing.

There’s no editorial line at Southbank Investment Research. It’s an ideas factory, not an indoctrination camp. All sorts of products come out of our assembly lines. And there is often disagreement between them. Contradictions which some subscribers struggle to comprehend. Others like it.

Southbank Investment Research’s freedom of ideas, and the freedom to tell people about them, is one of the reasons why I abandoned the investment banking world. I just couldn’t toe the line there. Especially once I realised nobody believed that line to begin with.

One of the rules in our business is that nobody gets to judge an idea, except the reader. And their judgement is final.

But think about what all this means for our relationship with you. You get something for free, at a substantial cost to the business, in the hope that you’ll like us enough to buy something eventually.

And then we have to keep you happy to stop you from leaving.

I think that’s the best possible alignment between customer and business of any firm anywhere.

Compare our incentives to your accountant’s, banker’s, stock broker’s, financial adviser’s, fund manager’s…

They make money because you are reliant on them in some way. And they have control over you and your money very directly. It’s a relationship based on fear and dependence.

We’re the opposite. We are trying to create independence. Not our independence, yours!

We want you to be robust, wise and wealthy. Gains we don’t share in financially, only emotionally. Through testimonials and by occasionally meeting you, as I did on Tuesday at my book launch.

Today is your final day to get my book for free, by the way. Only postage to be paid. And, as a paid-up subscriber, you’d be following me to Southbank Investment Daily from Monday too.

I suppose ads like that are the trade-off for receiving Capital & Conflict. You get to see plenty of opportunities to buy something from us. Which you can choose to ignore, but they are still there.

We try to include something of value in every piece of marketing we send you. Even if it’s just to make you aware of special offers.

But in the end, we are a business. The question is whether you value us.

Introducing your new editor

Your new editor of Capital & Conflict has been writing to you at least once a week already. And Boaz Shoshan will no doubt be reading this around about the time you do. He sits next to me at the office, so I have to be careful what I say.

If you’re wondering who we are and whether we even exist, check out this video of Boaz interviewing me about my book. You can decide who has a stronger accent. And see what our office looks like through a gap in the curtains.

On Tuesday at the book launch we discovered that Boaz is known as “The Shoshan” among subscribers. He has some big ideas you need to know about. I hope he keeps some for our subscribers at Zero Hour Alert.

Boaz digs deeper into the mud of the financial system than I did for you. He’s more of an investigator than a prognosticator. Which makes his predictions all the more shocking. They’re much harder to argue with. And much more specific.

Before I sign off, permanently but for the occasional exception, I’d like to finish with a bang. So here are some predictions for 2019, which, given my track record, means they are fairly likely to come true in the next three to five years.

Five predictions for the next five years

North Korea will reunify with South Korea and turn capitalist.

Sick of being a buffer state for China and Russia, North Korea will change sides. It’ll pitch to South Korea and the US for protection from its former masters in exchange for protection and prosperity. The gains on offer for brave investors and political policymakers in North Korea, South Korea, Japan and the US are growing over time. The costs for North Korea of staying aligned with Russia and China are growing.

Christine Lagarde will become head of a newly empowered European Stability Mechanism (ESM) and fail to bail out Italy and Greece.

The ESM is the European version of the International Monetary Fund, which Lagarde currently heads. At the ESM, she’ll be the guardian of northern Europe’s wallets in coming bailout battles with southern Europe. But southern Europe, led by Greece and Italy, will decide to leave the euro to avoid an even bigger populist uprising.

Australia’s banking system will implode, taking the economy down with it, and triggering a global financial crisis.

If you think the US sub-prime mortgage scandal was bad, you ain’t seen nothing yet. Australia’s banks make liar’s loans look honest. And that’s finally coming to light thanks to a Royal Commission. House prices are already falling. The Aussie dollar will halve and Australians will go from being the wealthiest people in the world to middle of the pack for OECD countries. The Australian crisis will be 2019’s Black Swan, just as sub-prime was in 2008.

Oil prices will spike spectacularly as one of the biggest frauds in history is exposed.

Much of the oil that certain Middle Eastern nations claim to have in reserves does not exist. But why fake them? OPEC rules allow countries to sell oil based on a proportion of their estimated reserves. The Saudis in particular have faked reserves to allow them to sell more oil each year. But at some point the game is up. Perhaps when their key oil company is subject to scrutiny once it lists on a major stock exchange. You always know something is up when a large private company lists on an exchange. It’s an exit strategy for the owners, not a way to raise capital to expand.

HMRC will pay Europe’s refugee immigrants to move to the UK.

Immigration will become the major political issue of the next decade. But in precisely the opposite way it is now. Countries will battle to attract immigrants from each other as demographics drag down their economies. HMRC will offer cash incentives for people to move to the UK. Who else will pay off the national debt as demographics turn down? HMRC will call it “an investment in the future of the UK,” meaning taxpayer conscripts are needed to fund pensions and the NHS.

Those aren’t exactly rosy predictions for the most part. Which means you might want to learn how to scalp the market – profit from plunging stocks. One of the trading legends hiding in the back of Southbank Investment Research is willing to show you how.

Until next time,

Nick Hubble
Editor, Capital & Conflict

Category: Market updates

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