My tip for future investments.
Funeral directors. Add in a few extras such as alternatives to burying or burning and you are onto a winner.
For traditionalists, investment in land suitable for cemeteries.
For those of the burning kind, super shrines for urns.
For techno people virtual memorials.
For the eco gang a whole range of options from forest burials to the more technical dissolving stuff (see what Sweden are trialling).
And let’s face it, dying is never going to go out of fashion.
Grim, but realistic – a fitting investment strategy for Capital & Conflict!
Thanks to all who wrote in last week on the topic of investing with a limitless time horizon. As I’m sure you can appreciate from the above, I received some very interesting responses!
Last week, I wrote about the resignation of one Yngve Slyngstad, the man at the helm of Norway’s trillion-dollar sovereign wealth fund. The fund has a mandate to grow perpetually with no exit strategy, and I was interested to hear what you would invest in, were you asked to make an investment that would deliver real returns for your grandchildren’s grandchildren.
It’s difficult to make predictions, especially about the future as the saying goes, and picking a “fire and forget” investment to be cashed out for a sure-fire real return at an undetermined point in the future is a puzzle, to say the least.
But as another saying goes, “in this world nothing can be said to be certain, except death and taxes” – and funeral directors would certainly fit the bill.
Or will the biotech radically advance our lifespans in the next few decades and put the sector out of business?
Some readers took a broader, more pragmatic approach:
The [Office for Budget Responsibility] make forecasts twice a year and they are always wrong, so knowing what’s going to be good in 50 years is impossible.
Back in the 80’s, I had a job attempting to forecast the future but only 10/15 years hence; the 1st thing my boss did was to plonk 2 forecasts on my desk from the 60’s, both were so wrong they were laughable. For example, one of them predicted that the very maximum number of “copiers” that could ever be sold in the UK was 1487 (no “0”’s required).
His point was that I should accept that what I would produce was going to be wrong but that the planning, analysis and thinking put into it might prevent even worse mistakes, by doing so, it enabled me to predict that we’d have to close a factory in an area in which we were responsible for 43% of employment more than a decade before we actually did it; what could have been an employment disaster for the area was merely a blip. Like the OBR, we repeated the prediction process every year, updating month by month with actuals.
And that’s what we have to do with investment: make a strategic plan based on long term objectives that is regularly reviewed (twice a year?) and adapted if events suggest such action is needed. For example, I’ve recently increased my allocation to value a little (away from growth). Two other “rules” in putting the plan together in the first place:-
- Dividends are important, they account for the lion’s share of any profit.
- Diversity is essential, hopefully, part of your portfolio will spare your blushes irrespective of what happens.
But what the hell do I know!
While others took a more “brass tacks” strategy:
Food and land are the two things which we will always need and use. Land is needed for there to be food. So I would go for land, farmland in particular.
I think Akhil Patel over at Cycles, Trends and Forecasts would agree with this one, certainly on selecting land as a core investment. In fact, Akhil reckons that were land, which absorbs the value of all the economic activity upon it, taxed effectively (instead of income or capital gains) that the UK Treasury would be so enriched that it could build a sovereign wealth fund of its own (and perhaps include some of these investments)…
I’m reading War by Other Means by Robert D. Blackwill and Jennifer M. Harris at the moment. It’s a winner so far, all about how nation states can use economic tools to coerce other countries to do their bidding, and sovereign wealth funds have become a key weapon of economic warfare as a result of their massive size.
It helps of course, that asset prices continue to be inflated by central banks, so they just keep on getting bigger and thus become more important to the market as a whole.
And just as we’ve written about the potential for central banks to start a green bubble with their anti-climate change policies, these other tools of the state could do it by merit of their massive size. Both Kuwait and Norway’s sovereign wealth funds, born of fossil fuel wealth, have ironically turned against it, with Norway recently divesting of oil and gas explorer companies, and Kuwait pursuing “green” assets. They’re both part of “One Planet”, a group of sovereign wealth funds that have banded together to invest in environmentally sustainable solutions.
But while the UK missed out on creating a sovereign wealth fund from the oil in the North Sea… James Allen thinks we’re about to get another chance at it.
And while the source of this wealth will come from nearby the oil wells of the North Sea… unlike the Norwegians and the Kuwaitis, this sovereign wealth fund won’t be born of fossil fuels.
All the best,
Boaz Shoshan
Editor, Capital & Conflict
Category: Market updates