thoughts as we finish out this Last Week of October 2020
Apple’s founder Steve Job on innovating; “There's an old Wayne Gretzky quote that I love. I skate to where the puck is going to be, not to where it has been.” Do not get caught up in today…tomorrow is our future.
It is predicted that cyber-crime will cost the world $6 trillion annually by 2021, double from 2015. This is serious…not just in real damages but in what it takes to combat online theft. It represents the greatest transfer of economic wealth in history and is more profitable than the global trade of all illegal drugs. Incidences of cyber-crime are corroborated by major media outlets, universities and colleges, senior government officials, associations, industry experts, the largest technology and cybersecurity companies, and cyber-crime fighters, globally. This week it really hit home: organized crime gang hackers hit hospitals and voting registration sites and the reality is that none of know what us to expect next week as America goes to vote. Cyber-crime costs include damage and destruction of data, stolen money, lost productivity, theft of intellectual property, theft of personal and financial data, embezzlement, fraud, post-attack disruption to the normal course of business, forensic investigation, restoration and deletion of hacked data and systems, and reputational harm. ☹ Why does this matter to you? The Yahoo hack affected 3 billion user accounts, and the Equifax breach in 2017 affected 145.5 million customers. Cyber-attacks are increasing in size, sophistication and cost and the question is, “how do you prevent a bank robbery no one can see?” While the losses and costs are huge, flip the risk…to return! One client, I will call her “K”, called last week to ask what companies that protect against cyber-attacks could she invest in, so I am bird dogging it for her right now! Do not ever think that “professional” investors have cornered the market on good ideas: I love bringing my technical analysis skills to your stock ideas.
The outlook for GDP growth next year is lower than the rest of the world: 3.7% annual growth versus 5.2% outside the U.S., following a 4% drop this year. U.S. trade and fiscal deficits are rising sharply, the dollar is falling, and U.S. stocks are overvalued: the price-to-earnings ratio of the S&P 500 is 30.6%. Last month I wrote about the overvalued “Super 6” tech stocks as why the S & P was positive for 2020 but now, Facebook, Amazon, Apple, Alphabet, Netflix and Microsoft have begun to roll-over and underperform. The U.S. stock market outperformed other global markets during the last decade, but it is common, after over-performing for years, to lag, like other global stock markets have after their peaks: Japanese stocks in the 1980s, European stocks in the 1990s and emerging market stocks in the 2000s. 😲 Why does this matter to you? One of my favorites to follow, Jeff Gundlach, predicts; “During this recession the U.S. will be the worst performing stock market over the next five years and diversification into international investments has never been more interesting.” He blames Federal Reserve policies for driving a retail frenzy in stocks as there was nowhere else to earn good yields and likened Fed intervention to “passing out candy to the children.” Opportunity awaits us!
Like a Jeopardy question “an engineering problem that, when solved, solves energy” with the answer being “what is geothermal energy,” David Roberts says it is time to take a journey to the center of the earth. More from David: “Fun fact: The molten core of the Earth, about 4,000 miles down, is as hot as the surface of the sun, 10,800°F. The heat is continuously replenished by the decay of naturally occurring radioactive elements and is expected to continue for billions of years.” AltaRock Energy estimates that “just 0.1% of the heat content of Earth could supply humanity’s total energy needs for 2 million years.” There’s enough energy in the Earth’s crust, just a few miles down, to power all of human civilization for generations to come and while all we have to do is tap into it, tapping into it turns out to be pretty tricky. The easiest way is to find it is where it breaks the surface, in hot springs, geysers, and steam vents near volcanic activity where warm water can be used for bathing or washing, and the heat for cooking. Slightly more sophisticated is tapping into naturally occurring reservoirs of geothermal heat close to the surface to heat buildings. In the 1890s, the city of Boise, Idaho, tapped one to create the first district heating system, where one central source of heat feeds into multiple commercial and residential buildings. After that came digging deeper and using the heat to generate electricity. The first commercial geothermal power plant in the US was opened in 1960 in the Geysers, California: there are more than 60 operating in the US today and more is developing at a dizzying pace. 😊Why does this matter to you? Some day we will wonder why we wrecked our planet burning dead dinosaurs! Expect for more alternative energy join your portfolio, and for our world be heated sustainably. Check it out, here!
We have lots to do over the coming months as Skye 2.0 rolls out in the next two weeks. Stay tuned!
Constancy noun con·stan·cy | \ ˈkän(t)-stən(t)-sē