June 17, 2013
- Each one of these ideas “could be a billion-dollar industry”: Byron King on the single substance destined to spawn new fortunes — maybe yours
- Volatility picks up: Chris Mayer unearths a mathematician’s startling insight… and the one takeaway for your portfolio
- Oil pops because world leaders have solved all economic problems… or something like that
- How to tell when the NSA’s on to you… why the boiling-frog scenario is more relevant than ever. Creative destruction unfolding in real-time… and more!
“Almost everywhere I go, almost every place I look,” our resource hunter Byron King begins, “I’m seeing new uses for what I call the ‘miracle material.’ Research budgets are skyrocketing. The top scientific minds of the world are flocking into a new field that barely existed five years ago.”
As you know, Byron has been tracking graphene since long before the digital newsreels even knew it existed. Today, a simple search in Google conjures up thousands of articles abuzz with the implications:
“Imagine a coffee cup,” one article from the American Chemical Society envisions, “that streams the day’s headlines in real-time. Or a cooking pot that can detect the presence of E. coli bacteria that could make you sick. Or a television screen that is as flexible and thin as a piece of paper. All of these applications could be a reality if the wonder material, named graphene, lives up to its hype.”
To separate the potboilers from the naked truth about graphene’s future, Byron has hit the road to hear it straight from the horse’s mouth… those who plan to line future tech with graphene.
“In the past year,” Byron goes on by way of example, “I’ve visited U.S. national laboratories, such as Sandia in New Mexico. I’ve visited restricted defense sites like the Naval Research Laboratory, near Washington, D.C. I’ve visited major industrial players like Boeing and… well, others that I toured, but under nondisclosure agreements that keep me from saying too much.
“In a recent meeting with one of the country’s leading carbon researchers, he told me that ‘each one of these [carbon-based] ideas could be a billion-dollar industry — or more — in its own right.'”
“Here’s what I can tell you,” he goes on: “I see all manner of new uses for this ‘miracle material.’ These new apps are taking the old economy to new places. Companies are already making big money — and planning to make an even bigger mint-load — with new applications for advanced batteries, better electronics, improved optics and stronger and lighter construction materials.
“Indeed, from the iPhone in your pocket to the airport where Boeing’s new 787 Dreamliner lands, it’s fair to say that this material has become the foundation for a new North American — and global — economic revolution. There’s a profitable way to play it, too.”
[Ed. Note: Byron’s profitable pick has grown from $121 million in sales in 2009 to $223 million in 2012. Plus, with its “large portfolio of over 700 patents” on graphite products, Byron believes it has a long ways to go before it hits its peak. Even so, most investors have yet to catch on to this tiny company. Your chance to learn how to get in before the big rush, though, ends tonight at midnight. Before you miss out, you can click here to decide for yourself, before it’s too late.]
“The 1,650 level is going to be an important upside barrier for the S&P to take out this week,” says STORM Signals editor Jonas Elmerraji.
“If we knock out 1,650 on Monday or Tuesday, I think we’ll make a quicker leg higher to end June. After all, this market has been correcting for four straight weeks now; buyers are clearly piling up under the 50-day moving average at the moment. We’re due for a move.”
At last check, the S&P is up about 1% this morning… good to boost it to 1,643.
“Stocks Jump as Market Bets Fed Will Tamp Tapering Talk,” reads the headline at Marketwatch. Yes, it’s all about the Federal Reserve this week. Tomorrow, the Fed’s Open Market Committee begins two days of meetings, at the end of which we’ll get the full-dress treatment of a policy statement and a Ben Bernanke press conference.
Can’t you feel the tingle already?
“I believe it is an analysis of the facts and history, and not a forecast, to suggest that the FOMC will stand pat,” suggests Vancouver stalwart Barry Ritholtz. “Anything can and will happen — humans are involved — but the odds are very much against it.”
“The stock market is getting jumpy,” observes Chris Mayer. “We’ve already had nearly as many 2% one-day moves in 2013 as we had in all of 2012 and 2011 combined.”
So Chris’ thoughts are turning to the work of the mathematician and scientific maverick Benoit Mandelbrot, who died in 2010. He applied his insights to scads of diverse fields, including finance.
“The great lesson I take from reading Mandelbrot’s work in finance,” says Chris, “is that market prices swing more violently than it seems they should. And such moves have a big impact in short amounts of time. ‘Big gains and losses concentrate into small packages of time,’ as he once put it.”
Consider this: Mandelbrot charted the S&P’s performance from 1985-2005 — a span in which the index rose from a little over 200 to about 1,200. He found that if you excluded the 10 biggest one-day price moves — most of which were negative — the index would have ended up closer to 1,900. What’s more, says Chris, “These patterns held in other markets and other time periods.”
But Mandelbrot believed all is not lost: “Markets are turbulent, deceptive, prone to bubbles, infested by false trends. It may well be that you cannot forecast prices,” he wrote. “But evaluating risk is another matter entirely.”
“The best investors,” says Chris, “seem to be those who are best at laying off risks. They are the ones who are particularly good at paying cheap prices for the risks they take. Low risk, but high reward is the combination all the great ones look to find.”
That’s the sort of thinking Chris has put into his “coffee can portfolio”. An odd name, but an unbeatable concept if you want to avoid market volatility and grow your wealth 20-fold. Seriously, that’s how powerful it is. Give it a look here.
Gold is slumping a bit as the new week begins, to $1,383. Silver is unable to hold $22, down to $21.86.
Oil starts the week on the cusp of $98 a barrel — nearly as high as it’s been all year. The Associated Press cites “concerns over an escalation in the civil war in Syria.”
Syria, we’re told, tops the agenda of a G-8 leaders meeting in Northern Ireland starting today. Guess they’ve solved all their economic problems and are moving on to other things, heh.
Elsewhere in the Middle East, Washington won’t have Mahmoud Ahmadinejad to kick around much longer. Ineligible to run for a third term as Iran’s president, he’ll step aside in a few weeks for Hassan Rouhani — who won election on Saturday.
From boogeyman to lame duck…
The reformist factions in Iran clustered around Rouhani. As such, The Washington Post’s editorial board assured us on Friday that Rouhani “will not be allowed to win.”
Uh, right: In the event, Rouhani pulled a little more than 50% of the votes in a field of six candidates, avoiding a runoff election. So there.
“We think that markets can remain relaxed about possible threats to oil output in the Gulf region for now,” reads an analysis this morning from Al Shafie Miles, a “business intelligence consultancy” focused on the Middle East.
“But nonnegligible risks persist and may yet start to rise again before the year-end unless both Tehran and the international community (and the U.S. especially) are prepared to strike difficult compromises over Iran’s nuclear program and over international sanctions.”
NSAs? There’s a plugin for that.
Twenty-three-year-old Justin Blinder made the plugin available to users of the Firefox Web browser days ago to “provide a soundtrack for our surveilled Internet meanderings.” It’s called The Dark Side of the Prism.
RT reports that’s because the extension “alerts Web surfers of possible surveillance by starting up a different song from Pink Floyd’s 1973 classic The Dark Side of the Moon each time a questionable site is crossed.
“Blinder told The Guardian that he built the program over the course of four hours with the hopes he could ‘create some sort of ambient notification that you are on a site that is being surveilled by the NSA’…
“I just Googled ‘Prism’ and the cover came up,” he explained. “I didn’t want it to be too jarring, because a lot of us seem to be giving in to being surveilled on a daily basis. I feel like people already know that. I didn’t want it to be alarming.”
Hmmm… So if you look up something about expatriation, you’ll get “On the Run”? Legal tax strategies bring up “Money”? What would you have to look up to hear “Brain Damage”?
And what if you illegally download The Wizard of Oz just to see
if the first half really does sync up with the album?
“I have started answering my phone,” a reader writes, “with the following: ‘This call is
being monitored by the National Security Agency. Anything you say can and will probably be used against you.’
“It is amazing how it turns off telemarketers. Will be interesting to see how it affects my call volume.”
The 5: After signing off with his name, the reader appended the following: “Note: The contents of this email have been read by the National Security Agency. There is no expectation of privacy.”
“It’s been a while since I’ve been motivated enough to send in a comment,” a Reserve member writes, invoking the boiling frog scenario. “The last 20 or 30 letters, however, trying to justify the current political environment finally hit my keyboard boiling point. I think the one that really did it was from the reader who wondered why there was such an uproar about the $3 million cap on retirement planning.
“I don’t have that kind of money myself, but that doesn’t keep me from seeing what is happening there. I must admit your reply (as usual) was spot on. Doesn’t anyone understand history anymore? When the goal of a government is to push down the achievers, they always start with small, incremental steps usually touted as temporary and always against a class that uses jealousy to push it through.
“The Nazis did it with gun control and segregation. The Soviets did it with promises of redemption for the poor, downtrodden woiker (yes, that’s the right spelling). Wilson did it with the income tax at 2% and more and only against the rich. FDR did it with the ‘temporary’ gold grab. There are probably thousands of examples. The excuses were all just PR. It’s always about control.
“Hey, I wish we had a ton of new millionaires every single day. Imagine the huge amounts of money available to be spent hiring all kinds of people and buying the products of businesses near and far. Imagine the investments in new industry. Imagine the lack of knuckleheaded political control with the real power (money) spread out that way.”
“A lot of good companies are born in recessions,” a reader writes after our best-of-times-worst-of-times episode last week. “If you can make it through these days, you’ll soar in the up market. Creative destruction at its finest, despite Bernanke’s best efforts.
“The only thing to wrap your head around is how incredibly powerful this force is. The Founders were rich white landowners that allowed monopolies and believed the state could and should supervise business until the Jacksonians and people like entrepreneur-turned-monopolist Cornelius Vanderbilt shattered their grip on the economy. Everyone gets theirs.”
The 5: No doubt. Our Patrick Cox is fond of pointing out how new fortunes were made in radios and refrigerators during the thick of the Great Depression.
You sound like someone who’d be at home at our Symposium in Vancouver next month. We’ll explore the world of investment possibilities opened up by breakthrough technologies and an energy revolution… even as the government and the banking system pile up unheard-of debts. The dates are July 23-26. You can find a full speaker lineup and other essential details at this link. Hope to see you there!
Cheers,
Dave Gonigam
The 5 Min. Forecast
P.S. Final reminder: Byron King’s briefing on the high-tech revolution unleashed by the material he calls “dirty gold” comes offline tonight at midnight. Here’s your last chance to check it out.