- The investing insight of R. Buckminster Fuller
- What do Standard Oil and Tesla have in common?
- Introducing “Precessional Investing” — prospering far from the crowd
- Trump resumes stock market punditry (is he reading The 5?)
- Coke’s cannabis buzzkill… and Ontario’s all-in-the-family pot fiasco.
“The more I studied people like Bucky, the more angry I became,” recalls Robert Kiyosaki.
We introduced you to Robert on Tuesday — best-selling author of the Rich Dad Poor Dad series, a renowned authority on generating streams of income, a one-of-a-kind financial educator. Oh, and now a superstar addition to the Agora Financial team of experts.
You know about his biological father — the “poor dad” who earned a good living but never could get ahead. And you know about his “rich dad” — the role model who Robert says became one of Hawaii’s wealthiest men.
But there’s a third major influence in his life — one who opened him up to an entirely new way of thinking about money, even though he wasn’t a businessman or a finance pro.
As a 20-year-old in 1967, Robert made a pilgrimage — OK, he hitchhiked — from Kings Point, New York, to the World’s Fair in Montreal.
“The centerpiece of the World’s Fair,” he recalls, “was the U.S. Pavilion, a massive geodesic dome that could be seen for miles.“The creator of the dome was a brilliant man, considered to be one of the greatest geniuses of our time.”
Robert was on a mission to meet R. Buckminster Fuller — the designer, inventor, writer and futurist.
“I believe he made 50 predictions in his life,” Robert recalls. “And at the time of his death on July 1, 1983, 48 of his predictions had come true.” One of the remaining two was the emergence of a revolutionary new technology by 2000, accessible to the masses. You and I know it as the internet.
From 1967 until the end in 1983, Robert forged a personal relationship with “Bucky” Fuller — chronicled in Robert’s 2015 book Second Chance.
Let’s return to a crucial point Robert made here on Tuesday: “Sadly, money is not taught in schools.”
It wasn’t until Fuller’s last book, Grunch of Giants, that the reason finally clicked for Robert. (Grunch stands for “gross universal cash heist.”)
“Reading Bucky’s work confirmed many of my unspoken — even unconscious — suspicions about the way the world worked.
“I began to understand why we don’t teach kids about money in school. Our educational system is rigged to only allow education in money to the uber-rich and powerful.
“This system has no interest in creating a well-educated nation and populace.
“What they want is a world filled with obedient employees, soldiers and consumers. Bodies to buy their products, fill their factories and fight their battles for them.”
But for Robert, Fuller’s greatest insight is one he’s used for decades now to overcome the limitations of that system.
“Dr. Fuller taught me an important framework for thinking called the Law of Precession,” he tells us. “It can be used to peer into the future… and to decipher where the truly great investments are.
“The term precession comes from physics. Technically, it is the change in a rotational axis… around an axis… around another body…”
Robert offers up an analogy: “What happens when a drop of water falls into a still pond? Ripples go out, right? Those ripples are the side effect of the water drop.”
“You can apply Dr. Fuller’s little-known law to business and investment,” Robert continues.
“Advancements in technology startups, partnerships, etc., can all cause ripple effects of opportunities. This simple but effective method of going beyond the surface and asking questions will help you see that there is always an opportunity.”
Picture it like so…
“Precessional Investing,” Robert calls it.
“It means identifying something different from what a novice investor would identify as an opportunity.”
That is, while the mainstream and the masses focus on the drop, Robert focuses on the ripples.
The best example at work in the markets right now is Tesla — and its mercurial founder and CEO Elon Musk.
“Tesla,” says Robert, “is the next flashy brand to offer an overvalued stock to uneducated investors.”
Don’t hold back, sir…
“Musk has leveraged his sense of showmanship in a way not seen since the golden age of Apple, when Steve Jobs would have the world glued to their laptops watching a four-hour keynote speech like it was the Super Bowl.
“He dominates the corporate news cycle with stories of private space exploration… mass transit systems that remind me of something from a Jetsons cartoon… and even personal flamethrowers.
“But what remains of Musk’s companies when the flash fades away? They are captivating, innovative and exciting and — let’s be honest — have yet to turn a profit.” (Yes, TSLA recorded a profit in its latest quarterly numbers — only weeks after the chief accounting officer quit. Heh…)
So what does all the TSLA noise mean in the world of Precessional Investing?
Not a thing, says Robert. “Precession tells us we should not go with the surface opportunity everyone is paying attention to.
“We should examine the all other pathways that come from or lead to that surface opportunity. Look at the ripple effect of opportunities that are set in motion by that first ‘obvious’ investment opportunity.
“Because sometimes those opportunities are richer by a long shot.”
That was the genius of Standard Oil back in the day of John D. Rockefeller.
It wasn’t just the obvious (oil) that made his fortune. “Rockefeller used precession to see the opportunities beyond the obvious. He invested his sizeable wealth into gaining influence over storage facilities, as well as the railroads that zipped back and forth across our growing nation.
“By the time Rockefeller was done, there was nowhere to hide.” Whether you wanted to burn oil, store oil or transport oil, you were paying Rockefeller to do so.
“The lesson here is simple. Be like Rockefeller. Use precession. Look at one opportunity and see the opportunities that surround it.”
— OK, so what does that mean for Tesla?
Forget the bull-versus-bear Tesla argument, which resembles a pro wrestling match in its theatricality. Focus, says Robert, on the only certainty: Musk is determined to roll the Model 3 sedan off his assembly line — aggressively.
Here are the three questions he poses…
- What opportunities does Tesla create outside its own assembly line?
- Who is profiting from Tesla manufacturing cars in the first place?
- What does every Tesla vehicle use?
Robert has shared some answers already, and a ticker symbol, with a select group of readers. But — in Robert’s spirit of financial education — you could probably come up with some answers of your own. Maybe a miner of lithium, which every electric-car battery needs. Maybe a battery maker. Maybe another maker of electric vehicles with better prospects (and less media hype) than TSLA.
In the weeks ahead, you’ll have the chance to join Robert’s circle of readers. A short time ago, he told them he has three guiding principles. “I want you to grow your wealth. I want you to take risks, as well as manage them. And I want you to be a success.”
To the markets, where investors are over October.
The final result of the “Halloween indicator” we’ve been following for the last two days is — drumroll, please — the Dow will not be plunged into a bear market. At least not according to the indicator.
The Dow number we’ve been watching is 25,100. Below that threshold? Uh-oh. But yesterday the Dow closed at 25,116.37. So… it was a squeaker, for sure.
Turning to the Dow this morning, it’s up 186 points, to 25,301.80.
The S&P’s also in the green, up about 20 points, to 2,731. Same for the Nasdaq: up roughly 60 points, to 7,364.21.
Oil is down just slightly, to $65.17 a barrel.
And… wow! Gold’s added $19.10 to its price. It sits at $1,234.10 per ounce.
Bitcoin’s off just over a dollar, to $6,307.50.
One number of note is the ISM manufacturing index, which dropped to a six-month low of 57.7 in October from 59.8 in September — that’s a point lower than analysts expected. For what it’s worth, the slight miss doesn’t seem to have affected the markets so far this morning.
“Trump has commented on the stock market more than 30 times since his election,” Bloomberg reports. (Pity the intern who was tasked with researching the total.)
“Conventional political wisdom held that presidents shouldn’t comment on the financial markets. Then came Donald Trump and Financial Twitter was never the same,” we’re reminded.
Hmmm… The most recent presidential market tweet came on Tuesday. Colleague Greg Guenthner points out it departs from the usual cheering for all-time highs or other milestones…
Really, we can’t dispute the meat of that analysis. As we said a few days ago, there’ve been two short-term drags on the market lately — uncertainty over the midterms and the “buyback blackout window” that forbids most companies from repurchasing their shares in the weeks before they issue quarterly earnings numbers.
Both of those factors will evaporate in a few more days. In addition, we hasten to point out again that Democrats captured both houses of Congress in 2006 and the market kept climbing well into 2007. Don’t let partisanship drive your investing decisions.
[While we’re thinking about it: Bloomberg is wrong when it implies Trump is the first president to talk up the stock market. We recall Barack Obama doing likewise, and at a pivotal moment — only days before the Panic of 2008 bottomed out and the current bull market began.
There’s a whole interesting and sordid history of crony capitalism to be told there… but we’ll wait until we get closer to the 10th anniversary in a few months…]
Buzzkill: Coca-Cola says it’s not interested in cannabis beverages after all.
In September, news emerged that Coke was talking with Aurora Cannabis of Canada to develop drinks infused with CBD — that’s the pain- and anxiety-relieving chemical in marijuana, not the THC that gets you high.
Coke issued a classic nondenial denial at the time… but during Coke’s earnings conference call this week, CEO James Quincey said the firm “doesn’t have any plans at this stage.”
That said, CNN tells us “there is still growing interest in CBD from larger global consumer companies ever since recreational marijuana became legal in Canada” last month. That includes Pepsi, as it happens.
Meanwhile, the finger-pointing is underway for the big cannabis shortage in Canada’s biggest province.
As we mentioned last week, there’s only one legal retailer in Ontario — the provincial-owned Ontario Cannabis Store. As you might expect with a government-run venture, shortages abound and customer service is horrendous — especially for online buyers.
Who’s responsible for such a dunderheaded call?
“If you look at how much changed with the election of Doug Ford, that can give you some key indications of why the e-commerce rollout has been rocky in Ontario,” says Jordan Sinclair, spokesman for the Canadian cannabis producer Canopy Growth.
Heh… Doug Ford is the premier in Ontario — and the brother of the late Rob Ford, Toronto’s infamous crack-smoking mayor. And by several accounts in the Toronto Globe and Mail, Doug Ford was a hashish dealer in the ’80s.
But despite that, uhhh, experience in the recreational drug sector, Ford saw fit to prevent private sellers from setting up shop in Ontario until next April.
Meanwhile, dozens of complaints have flowed into the provincial ombudsman’s office. “As is our normal process,” says a spokeswoman, “our staff are reviewing all complaints and resolving them informally wherever possible. At present, we are in contact with OCS officials and monitoring developments.”
Ah, bureaucracy — don’tcha love it?
The 5 Min. Forecast
P.S. Many followers of Ray Blanco, America’s foremost pot stock authority, collected big gains this year on those Canadian cannabis plays we just mentioned.
Aurora Cannabis? Up 350%. Canopy Growth? Up 420%. (We still love the serendipity of that second number.)
But don’t feel bad if you missed out. Ray says a brand-new catalyst for other names in the sector is coming into view just days from now.
Cannabis measures are on the ballot in four U.S. states. Recreational weed is set for victory in Michigan — a Midwestern first. Medical cannabis will likely become legal in Utah, of all places.
The opportunity is so big that Ray has arranged a special election night briefing you can watch live — where he’ll be joined by TV host Montel Williams.
If you watch, you can be positioned in the highest-potential companies the next morning.
The event is set for next Tuesday at 8:00 p.m. EST. You can watch FREE. Drop us your email address at this link and we’ll send you a reminder as we get closer to the day.