NB-We hadn’t read the comments to yesterday’s notes before writing today’s. A clarification on Al Gore’s movie. As we wrote yesterday, the movie raises a valid point. We were simply objecting to the hectoring, condescending and self-important style of Al Gore. Will we eat our words if he decides not to run for president in 2008? No! But if we were a drinking man, we’d certainly drink to it. If Gore were less pretentious, he’d probably be president today. And he would have had an anonymous narrator, or someone with a good voice like Morgan Freeman narrate his film. As it is, the interludes about politics and his personal life strike us as little more than vainglory. If the important thing is to get people to pay attention to global warming, why so much attention on Al Gore’s political life? We’re just asking…meanwhile, today’s notes and some notes of optimism about our energy future below.
–How much more can be said about what to expect in 2007? Not much, we reckon. It’s time to see what the year brings us. If yesterday (and trading so far today) is any indication, new highs…for everything. The ASX/200 is flirting with 5,700 as we write. And who can blame it? Even though private equity is making regulators nervous, it is also probably driving prices up in the share market as investors speculate which firms might be next on the pirate hit list.
–There is also $34 billion dollars or so of surplus superannuation cash looking for a home, according to Phillip Baker in today’s Financial Review. That money will probably find its way into domestic stocks. Despite legitimate concerns about earnings multiples, each of us wakes up each day and has a simple decision to make: what will we do with our money? Long stocks? Short houses?
–But for now, we depart from our normal market-based format to bring you causes for optimism. We were worried after our rather downbeat letter yesterday you might get the wrong impression of the general disposition of the Markets and Money. We are not pessimists. More like romantic realists.
–Death is a natural part of life. Coming directly into contact with it again for the first time in awhile was a little like cutting your finger while chopping vegetables. You feel the pinch, then look down and see blood and are somewhat surprised and curious. And then it hurts.
–But as we said, it’s natural too. And, clinically speaking, a demographic reality that’s going to exert a lot of pressure on investment markets in the coming years. Many aging boomers and people like our father are trying to figure out how to dispose of their assets to their children…and concerned about whether their children will be able to preserve those assets. Then there are those who don’t have any assets on which to rely for retirement income. Who will pay for their increased medical needs? But now we’re getting abstract…we were talking about open wounds.
–Seeing your own blood at least reminds you that you’re alive. Life, along with the stock market, has its rhythms, cycles, and necessities. Yet there is plenty of reason for optimism too, or so we hear. It’s not our regular beat, or our disposition, but we did come across some intriguing reasons why some very smart people are optimistic in 2007.
–It’s called, “The World Question Center.” You can find the whole thing at http://edge.org/q2007/q07_index.html . We cherry-picked a few entries below, mostly the ones dealing with energy. The emphasis in these entries is on Efficiency, Substitution, and Innovation, the “ESI” in our “MESI” formulation for the energy future (“M” being more hydrocarbons like oil and gas.) Our special interest is on fuel-cells. You’ll be reading more on that shortly. Meanwhile, optimism from other people below…