Lesson 23: Investing in the 2020’s Global Economy
April 23, 2019
Review:
- Exam 4 Results
- Course Evaluations
- Final Exam on Thu Apr 25
Presentation:
- Final Exam Review Topics
- World Geography
- Guns, Germs & Steel
- History of Oil and Conflict in the Middle East
- Saudi Arabia and Saudi Aramco
- War in Syria and resulting refugee crisis
- World War II and 20th Century Europe
- European Union
- Oil Prices and Putin’s Russia
- Population Growth in India
- China’s dramatic economic rise
- Japan’s “lost decades”
- Natural resource extraction in South America
- Lithium Triangle
- Yasuni ITT Initiative
- US foreign policy in Central America during Cold War
- US-Mexico Border
- Outlook for the global economy
- Bullish long-term (20+ years)
- Bearish short-term (5-10 years)
- Drivers of long-term growth
- Information technologies
- Medical technologies
- Globally integrated markets
- Emerging economies (India, East/Southeast Asia, Latin America)
- Demographic trends
- Barriers to long-term growth
- Automation =Displaced workers (Economist PDF)
- Sovereign Debt | Since 19th Century
- Nationalism
- Corruption
- Environmental degradation
- Reprise of the Roaring 20’s ?
- All investing is value investing (otherwise, it’s speculation)
- Buy solid businesses at discount prices
- Most publicly traded companies are overvalued
- Most US real estate is selling at retail prices (very few discounts)
- Emerging markets
- Watch for major price reductions in healthy assets
- Reliable vehicles for wealth accumulation
- Rental property
- Productive land (farms, timber, mineral rights, water rights)
- Profitable businesses (that you own, not where you work)
- Dividend paying stocks
- It’s only an asset if it generates positive cash-flow
- Future of money
- Currencies may be a wild ride
- US Dollar
- British Pound
- Euro
- Renminbi (Chinese yuan)
- Japanese Yen
- IMF basket of reserve currencies
- Precious metals – as volatile as the currency used for pricing
- Gold, Silver, et al
- Cryptocurrencies
- rhymes with .com boom/bust in 1999-2000
- only one Amazon.com emerged
- 1 year ago $8,850
- Low in Dec 2018: $3,180 ( – 64.1%)
- Yesterday close: $5,370 ( – 39.3%)
- Tough competition
- Currencies may be a wild ride
- Wealth
- Essentially, all legal contracts
- Except commodities (keep them in a safe place!)
- Who to listen to
Assignment:
- Study for Final Exam
- Thank you for being a great class!
