Here's a great contrarian investment idea for you.
The whole world is obsessed with the risk of global warming. So take the other side of the bet, and invest in global cooling. I'm totally serious.
This idea even has a deeper level of contrariness going for it. It's your chance to do exactly what the old Wall Street cliché tells you not to do -- to play the stock market based on sun-spots.
Truly, I'm not kidding. Based on the hard-science of sun-spots, there's very good reason to believe that the unusually cold weather the world has been experiencing for the last couple years -- and that we're experiencing all over America this very moment -- will last for many more years. If it does, that has profound economic implications, and gives rise to some very interesting investment opportunities.
This winter is already about the coldest since the early 1980s across the United States and Europe. It's leading to an unusual number of weather-related deaths, as well as widespread surges in home-heating costs, transportation delays and crop damage.
How can this be happening when there's supposed to be global warming?
It's simple: The answer probably can be found in the cyclical behavior of the sun, specifically the regular ebb and flow in the number of sun-spots. Even if the theory of global warming based on man-made greenhouse gases is entirely correct for the long term (I'm not granting that -- I'm just saying "even if"), then within that we could still experience major intermediate-term cold snaps due to solar activity.
Astronomers have been observing the sun and keeping records of sun-spots for centuries. At the moment, the number of sun-spots is pretty much zero. It's the very bottom of the solar cycle. Over history, that cycle has had a period of about 11 years. So if the past is any guide, we could be in for another couple years of very low solar activity. A very low number of sun-spots has been historically associated with periods of cooler weather. The "Maunder minimum," named after the 19th century scientist who discovered it, was a long stretch of near-zero sun-spot activity in the late 1600s which some believe triggered a period known to climate historians as "the Little Ice Age."
Another period of low sun-spot activity was the "Dalton minimum," named after another scientist, which occurred in the early 1800s. At the worst of it in 1816, the world experienced what climate historians call "the year without a summer." Crop failures were so severe that most of the Western world suffered food shortages. There were food riots throughout Europe. That's why some historians call it "the poverty year."
We're at a new sun-spot minimum right now. I'm not saying it will lead to an ice age, big or little. Nor am I saying it will lead to food shortages. But if the extremely cold weather of the last couple years and this winter persists for several years more -- and especially if it gets worse -- we would definitely get some very major disruptions in our lives.
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