Sunday, August 2, 2009

Opportunities Ahead

I spend the bulk of my time explaining the fall of the economic might of our country and how you can protect yourself during this process. I plan on continuing to spend the majority of the time here discussing that macro event and why it is taking place.

The main form of protection of this oncoming change is to take yourself out of the US dollar. You can do this in multiple ways:

1. Foreign currencies invested in foreign stocks, bonds, and cash.

2. Natural resources and natural resource stocks.

3. Gold/Silver and mining stocks.

I feel that if you spread your wealth 100% across these investments (including selling your home and renting), you will not only be protected but will significantly profit when our currency falls.

This is actually the easy part, the tougher question is what happens then? What happens if you protect yourself and it turns out that I am right?

In my mind what will happen is that the United States will become a much poorer country. We will be focused on family, friends, and working to rebuild the country that we destroyed.

We will become an emerging market with fantastic investment opportunities.

One of those investment opportunities will be businesses focused on exports. When our currency falls it will not hurt everyone; businesses that sell goods to foreign markets such as Asia will thrive. In my mind the absolute best business will be to sell food to China; agriculture.

If I lay out a map in front of me and I look through the lens of the future, I look at an area like Tri-Cities in Washington. This is one of the largest food producing regions in the country, but more importantly they are close to the west coast. Close to a shipping port that can send goods to China.

My personal focus is real estate. I spend my business hours managing a large apartment complex. I do this to see, touch, and feel on site what it takes to make an asset perform. I particularly like real estate for two reasons:

1. The market is just beginning its fall and before the downturn is over will present buying opportunities never again seen in our lifetimes.

2. It can be bought with leverage; borrowed money. I can approach banks with management experience, private capital, an attorney, an accountant, and solutions to remove their debt. If you are professional and can speak with the vocabulary of a real estate investor then no part of the conversation with the bank will focus on how much money you have in the bank.

If anything that I say here during my rants and raves makes sense or seems reasonable, I would do two things:

1. Take at least some portion of your wealth out of the US dollar.

2. Try to imagine how to position yourself best as the world re-aligns.

Wayne Gretsky used to say that he skated to where the puck was going, not to where it was.

If you have any thoughts or ideas on how to profit from our new world, I would love to hear them.

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