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Saturday, 31 July 2010
The Daily Reckoning Weekend Edition
Saturday, July 31, 2010
Laguna Beach, California
Joel Bowman, reporting from Laguna Beach, California...
We begin this weekend missive with a few fundamental, though seldom asked, questions.
What is wealth? What is freedom? And in what way(s) are the two related, if at all?
When we think and write about wealth accumulation and protection in these pages, we’re generally referring to material wealth. Whether ther
e’s an opportunity to be had betting on a speculative resource stock, safety gained through a dividend play, or the honesty of a few gold bars stuffed under the mattress, wealth is, more or less and for better or worse, usually measured in dollars and cents...or ounces, barrels, acres etc.
But what about non-material wealth? Can one ever be truly rich without also building a wealth of experiences, or a wealth of knowledge? What about the richness that comes from the invaluable relationships we forge with friends and family along this journey of life? Just as prudent investors diversify their holdings across a range of asset classes, it is important not to neglect the non-material when assessing one’s own personal wealth management program.
In and of itself, wealth is a means, not an end. If the ultimate goal in life is to achieve personal freedom, to live and love as we wish to, we must consider not only the freedom that secure finances can afford us, but also freedom of mobility, political freedom, and the freedom to practice (or not to practice) any religion one so chooses, to name but a few important considerations.
This weekend, your homeless editor will set off on a month-long road trip across the U.S.A., retracing the footsteps of some of the great wanderers from days gone by. Part of the motivation is to garner a first hand look at how everyday American families are dealing with the ongoing correction. Homeownership is at a decade low. Foreclosures are at record levels, and still rising. Factories are cutting costs as manufacturing moves offshore. So far, 8.5 million jobs have been lost since the crisis began a couple of years ago. How are these people fairing? What are their hopes and aspirations for the future? What are their opinions and experiences? What do they envision for their children and grandchildren? How do they feel about the direction their country is heading...and what do they propose to do about it?
We hope to find out.
From our temporary digs here in Southern California, we’ll journey east across this great land, over desert, mountain and plain. If all goes to (our very rough) plan, we’ll wrap the tour up in Miami, probably sometime in early September. We’ll keep you updated on our whereabouts and on how things look on the ground. Stay tuned for sketches and scribbles along the “Daily Reckoning Coast to Coast Correction Tour.”
To get us all in a peripatetic state of mind, we’ve got a special guest column for you in this weekend’s issue. Alex Green is the investment director over at The Oxford Club and, perhaps more germane to today’s topic, also an enthusiastic traveler. In his essay, below, he offers some thoughts on non-material wealth and the indispensable experiences an open mind can bring when coupled with an open road. Please enjoy...
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Alexander Green’s Momentum Alert Video Presentation...
Shocking Video Blows the Lid off Mainstream Financial Press
If you have just a few minutes to spare, please do yourself a favor and watch this short presentation. You’ll discover the surprising truth on how the “talking heads” on TV could already be destroying your wealth. This is unlike anything you’ve heard before – and it’s more important now than ever that you take a listen. SimplyCLICK HERE and make sure your speakers are on.
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A Classroom Without Walls
by Alexander Green
Charlottesville, Virginia
Last November, my wife Karen and I toured the Mediterranean with a group of friends, landing one day at the Great Pyramids at Giza.
It’s not those marvels of the ancient world that I remember most vividly, however, or the majesty of the Sphinx, or the sweep of the desert beyond. It’s the camel abduction.
On the way to the pyramids, our guide told us to keep a wary eye on the local peddlers. “Having someone take a photo of you in front of the pyramids should cost a dollar,” he said. “A camel ride is about three dollars.”
Minutes later, as I was gazing up at the imposing Pyramid of Khufu, an older gentleman invited me to take a jaunt on his camel, a mangy beast who was, unfortunately, standing just upwind. As I looked on with mild interest, he whistled for the animal to kneel down.
The next thing I knew he was firmly escorting me onto the saddle and whistling for the camel to rise. Our group laughed and cheered as the camel driver led me off toward a rocky outcrop eighty or so yards away.
As soon as we were out of sight, however, the driver brought the camel to a halt and I was quickly surrounded by eight or ten Arab men shouting angrily at me in broken English to pay them each twenty dollars for the ride...now!
I said no and told the camel driver to take me back. He turned away as if he couldn’t hear me.
The group of men now pressed in tighter, feigning greater anger, as if I had somehow stiffed them all for the ride, which had so far lasted about 45 seconds. “Pay us now!” they shouted again, their hands stretched upwards.
We were at an impasse. I wasn’t about to pull out my wallet in front of this pack of hyenas. And I was too high up and boxed in to jump down. The men continued shouting and waving their arms. I shook my head and sat on my wallet like Jack Benny, wondering how this was going to play out.
About then, a fellow tourist wandered by, recognized what was going on and barked at the men to back off. “He said he would pay you,” he insisted. “Let him go.”
At this, the Arab men melted away and the camel driver turned and led me back.
I’m sure this incident would have infuriated some, but I was more amused than rattled. I had never sensed any real danger. The men didn’t threaten violence or brandish any weapons. This was sheer intimidation, a tawdry little shakedown. And a reminder that Egypt is not Des Moines.
Back home, I discovered that friends and colleagues were only vaguely interested in the ruins of ancient Greece, the history of Jerusalem or the serene beauty of the Amalfi coast. “Tell us again about the camel abduction,” they said.
Apparently, it was the highlight of the trip.
Not all travel is a success. With expectations high, things can go awry, especially in a foreign land. But even the occasional bad incident makes a good story. (And, perversely, the worst trips make the best ones.)
Most of my travel abroad, however, has not only been great fun but the best part of my education. This idea was once widely accepted.
In his Essay Concerning Human Understanding, John Locke argued that we absorb knowledge from our immediate environment. If you spend too much time in one place, you can “use up” its educational value. In order to grow, you must change locales.
In Victorian England, for example, travel abroad was more than just a mark of privilege. A “change of scenery” was a mandatory part of an upper-class education. The Grand Tour was the capstone of scholarship.
It was a rite of passage that marked a superior understanding of the world. Young aristocratic gentlemen (and later young ladies) set out from the white cliffs of Dover for the Continent with their personal tutors in tow to gain knowledge from the worlds of classical antiquity and the Renaissance, to understand the cultures and ideas that underpin Western Civilization.
Of course, the urge to travel – to open our minds and move beyond the familiar – is as old as mankind itself. It drove our ancestors out of Africa and around the globe. It motivated the ancient Romans to visit Verona’s amphitheater and Athens’ Acropolis. Philo of Byzantium was already listing his Seven Wonders of the Ancient World in the third century B.C. The spirit of adventure, the quest for understanding, and, of course, the dream of great riches pulled Marco Polo to the East and men like Columbus and de Soto to the West.
Travel broadens the mind, increases tolerance, and connects you with your fellow human beings. The more we understand others, the better we understand ourselves.
There are good people and unusual sights everywhere you go. Venture widely enough and you’ll enjoy exotic foods, extraordinary architecture, and jaw-dropping landscapes.
Exploring the world is like attending a classroom without walls. It enriches and changes you. The only requirements are patience, curiosity and a bit of money. (A traveler’s tip: Pack half the clothes you think you’ll need and twice the cash.)
Travel abroad fills in the gaps in our knowledge, dispels our preconceptions and offers endless surprises. Those who forego the opportunity truly don’t know what they’re missing.
It’s sad to go through life thinking foreigners are just strangers who dress oddly, eat bizarre foods, speak in incomprehensible tongues and drive on the wrong side of the road. As Mark Twain observed, “travel is fatal to prejudice, bigotry and narrow-mindedness.” A voyage abroad teaches acceptance and humility. When you travel, you are the stranger. You are the foreigner.
Your kids and grandkids should discover this too, beginning with travel closer to home. Years ago, I became mildly nauseated by all the toys and games my son and daughter were receiving on their birthdays and at Christmas.
A trip – even if it’s only to the local fair or the town next door – is a far better gift. For kids, every outing is an adventure. Why not spend your time and money collecting memories instead of more stuff?
It doesn’t need to be some place exotic, especially when they’re young. Just make for the horizon and see what’s out there. Traveling without knowing where you are going, without having any particular destination in mind, is one of life’s great pleasures.
Of course, there are plenty of resources to get your mind working on places you’ve never considered. One of my favorites is Journeys of a Lifetime: 500 of the World’s Greatest Trips, a lavish volume put together by National Geographic.
Another handy guide is the bestseller 1,000 Places to See Before You Die by Patricia Schultz. It’s is a fine way to investigate destinations both on and off the beaten track. I’ve gotten in the habit of taking it with me on business trips to make sure I don’t miss the local sights and events. (If you’re on a tight budget – or unable to travel overseas – there’s even a version dedicated solely to the U.S. and Canada.)
In short, travel broadens our perspective and sharpens our view of the world. Rather than imagining how things may be, we see them as they truly are.
Your mind becomes more tolerant, your heart more magnanimous, your opinions better informed. And once your perspective is enlarged, it never shrinks back to its original state.
Some people make a pledge to visit all 50 states, or all seven continents, or fulfill some other checklist. And that’s fine.
But your ultimate goal is not a place, but a new way of seeing things.
Carpe Diem,
Alex Green,
for The Daily Reckoning
Joel’s Note: Alexander Green is the Investment Director of The Oxford Club. A Wall Street veteran, he has over 20 years experience as a research analyst, investment advisor, financial writer and portfolio manager.
In his latest video presentation, Mr. Green tackles the “talking heads” of the mainstream media and reveals the truth about how they could be destroying your hard-won wealth and freedoms. Daily Reckoning readers are invited to view his presentation here.
Mr. Green is also the author of The New York Times bestseller The Gone Fishin’ Portfolio: Get Wise, Get Wealthy...and Get On with Your Life.
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ALSO THIS WEEK in The Daily Reckoning...
By Byron King
Pittsburgh, Pennsylvania
According to many of this year’s conference presenters, the assault on American enterprise is intensifying. Because the government has been overpromising, overcommitting and overspending for decades, it is hurtling toward a fiscal train wreck. The numbers have stopped adding up. Looking out, there’s NO WAY that most Western governments can ever pay their ongoing obligations or pay off past debt. But that doesn’t mean that governments won’t try to maintain their expensive and intrusive invasion of the private sector.
By Chris Mayer
Gaithersburg, Maryland
I’m back from the Agora Financial Investment Symposium in Vancouver. As usual, this great event offered a diverse mix of ideas. Doom seemed to prevail often enough, with many speakers calling for a healthy drop in the stock market and challenging economic times ahead. Even so, there was plenty of enthusiasm for certain ideas. More about which, below...
By David Galland
Last week, the price of gold again broke below its new base at $1,200, and the US stock market was again under strong pressure, due to a confluence of fears, most of which point to a deflationary double-dip. The fears were fanned by disappointing second quarter results, by the latest CPI reports that show inflation continuing to moderate, and by yet another poll revealing faltering consumer confidence.
By Byron King
Pittsburgh, Pennsylvania
While BP has been busy spewing oil into the Gulf of Mexico, many other oil companies have been busy finding oil under the waters of other gulfs, seas and oceans. In fact, Brazil’s state-controlled energy giant, Petrobras (NYSE:PBR), just announced a major oil discovery in offshore Angolan waters. Water depth is about 1,500 feet. The “net pay” zone is almost 1,500 feet of oil-bearing reservoir, far below the seabed. The preliminary estimate is that there are over 500 million barrels or recoverable oil in place. That’ll likely grow, as additional wells go down over time. It’s always nice to strike oil.
By Bill Bonner
Paris, France
What does an economist think... when he adjourns to the local bar...or is hauled away to the asylum? In the dead of night or the quiet of a confessional, does he laugh sourly at having fooled most of the people most of the time? Or does he curse his trade and feel like hanging himself?
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Dear Daily Reckoning Readers...
For seven years, we’ve been conspiring to put together a research advisory service that covers the nexus between money and politics, between Wall Street and Washington.
We wanted to cut through the clutter you see from corrupt and polluted research departments at the biggest investment banks on Wall Street to deliver you useful ideas on how to protect and grow your wealth.
Now after seven years, countless hours spent and miles traveled, conferences attended and books written, we’re finally ready test the idea of Apogee’s high vantage point research again...and we need your help.
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The Weekly Endnote: As always, fellow reckoners are invited to have their say on the day’s pressing issues. If you’d like to pen us an email – with or without helpful travel suggestions and “must sees” along the southern states – please feel free to drop us a line at the address below.
First stop, Vegas.
Until next time...
Cheers,
Joel Bowman
Managing Editor
The Daily Reckoning
P.S. Byron King’s “Oil Kitchen” video presentation went live this week. We haven’t had a chance to watch the whole thing yet, but we did catch his speech up in Vancouver last week. Put simply, it was one of the best we saw...and the line-up was world class. As a Harvard grad and our resident Daily Reckoning geologist, Byron sure knows a thing or two about opportunities in the energy sector. If you’ve got a few spare minutes, you can catch his video here.
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