The most important companies in the world are absurdly cheap
1866 was not an auspicious year to start a business in the United States. America
Investing
Sovereign Man founder Simon Black and 4th Pillar editor Karl Bagga, are very bullish on real assets.
Let’s take a look at their investment thesis below…
In the US and much of the Western world, inflation is here to stay. The days of “FAANG stocks and chill” – investing in Facebook, Amazon, Apple, Netflix and Google, all entertainment and consumer oriented stocks – are long gone.
Hence, at Sovereign Man, we turn to real assets with a proven history of beating inflation.
A real asset is a valuable resource that requires hard work, talent and ingenuity to produce, and cannot be conjured out of thin air by politicians or central bankers.
Real assets are scarce. They have universal value. And they are productive, or can at least be put to productive use.
Gold is an obvious example. It takes a lot of effort to produce an ounce of gold, and gold can be put to productive use. Most of all, central banks cannot conjure it out of thin air like they can print trillions of dollars.
This is the case with most commodities as well. However some commodities are far more valuable and in-demand than others.
Agriculture and energy, for example, are the most important resources in the world and will always be in demand. And these companies are currently trading at absurdly low prices – because nobody wants them.
Productive technology is also an important real asset; anything that makes the world better, faster, and cheaper has intrinsic value. (And is distinct from ‘consumer technology’, which just involves swiping, scrolling and wasting time…)
At Sovereign Man, we’re very bullish on Oil and Gas. This real asset sector is outrageously undervalued, and critical to our survival as a species. It is thus not going away, regardless of what the green energy brigade has to say…
Discover why Simon Black and the team believe that real assets – and nuclear and oil and gas, in particular, will be experiencing a renaissance in the years to come…
1866 was not an auspicious year to start a business in the United States. America
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Introductory paragraph highlighting why the following books and authors are essential reading for those who want to make the most of the coming real asset bull market’s opportunities…
As an investor, it is easy to get caught up in the details when you are investing in the markets. And the details absolutely matter.
However, there are times when everything is subservient to the bigger macro picture. And we are living through one of those times right now.
As Simon has frequently argued, inflation is here to stay. These higher rates also reflect the atrocious balance sheets of most western governments – led by the US.
In the past, investors were happy to lend to Uncle Sam at 0%, especially when inflation was so low.
But now that the US national debt exceeds $33 trillion and the government posts $2+ trillion annual deficits, investors are starting to expect a higher return for taking the risk of loaning to such an insolvent institution.
The obvious conclusion?
“High’ interest rates will bankrupt western governments. And since none of these governments can afford to pay 5%, central banks will need to resort to some form of money printing in order to bail out their governments.
Hence, we are in an extremely dangerous period for markets with heightened volatility.
At times like these, the markets often shoot first and ask questions later.
And it is precisely why, in The 4th Pillar, we focus on well-capitalized, low-cost producers of vital commodities that generate significant Free Cash Flow.
Will those characteristics make a stock immune from broad market selloffs?
No. But they will help to make the underlying businesses immune from them…
Which is to say, for us, all roads lead to real assets.
And below, you can find out how to combat inflation and safeguard your buying power against government incompetence…
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