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Paul B. Farrell Archives | Email alerts
Feb. 7, 2012, 12:01 a.m. EST
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By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) "” Doomsday Capitalists know how to get rich by playing the short-term stock market and ignoring long-term warnings of a global economic collapse. How? They have a secret weapon, a Doomsday Capitalists Winning Strategy.
Here's how you can use this secret:
Throughout Mexico's northern state of Coahuila, thousands of livestock have been starving to death as a result of the area's worst drought on record. Jean Guerrero reports.
Plan now for "a breakdown of the civilized infrastructure" warns hedge fund guru Barton Biggs in his best-seller "Wealth, War and Wisdom": "Your safe haven must be self-sufficient and capable of growing some kind of food "¦ It should be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson."
Also think about apocalyptic films like "Mad Max" and "The Day After Tomorrow." Stock an arsenal of guns and ammo: "A few rounds over the approaching brigands heads would probably be a compelling persuader that there are easier farms to pillage." Yes, that's how the "Final Days of Earth" look to the world's leading Doomsday Capitalist.
Biggs is no left-wing environmentalist. He joined Morgan Stanley about the same time I did. Stayed three decades. As Morgan's chief global strategist, Institutional Investor magazine put Biggs on their "All-America Research Team" 10 times. SmartMoney called him the "premier prognosticator on the international scene and a mover of markets from Argentina to Hong Kong." Today he runs Traxis Partners, a successful hedge fund.
Biggs invests money for the Super Rich: How to invest today. How to stockpile wealth and assets preparing for a "breakdown of the civilized infrastructure." Biggs is a textbook Doomsday Capitalist, one of Wall Street's geniuses capable of seeing and predicting the future while outguessing a world of myopic short-term traders.
Yet, Biggs sees the world much like anthropologist Jared Diamond, author of "Collapse: How Societies Choose to Fail or Succeed," the guy who tells us that "one of the disturbing facts of history is that so many civilizations collapse." That many "civilizations share a sharp curve of decline," beginning "only a decade or two after it reaches its peak population, wealth and power." Yes, around 2020.
So how can average Main Street investors build a winning portfolio? "¦ Start by thinking about Mad Max and Swiss Family Robinson. "¦ Then add a positive spin to Diamond's 12-part analysis of the historical collapse of civilizations. "¦ Mix in the Doomsday Capitalists short-term strategy. "¦ Ignore future consequences because you know you won't be around later, and hope new solutions will emerge through new technologies?.
Well folks, if Biggs can achieve this goal successfully for Super Rich clients who are preparing their well-stocked farming compounds for the "collapse of the civilization," you can too.
Start by picking some blue-chip stocks that fit Diamond's 12-part "Collapse Equation," hoping that while Diamond warns that throughout history politicians inevitably fail to plan or act in time to avoid a collapse, this time, maybe, just maybe, our profit-making capitalist giants will finally wake up to Adam Smith's vision and protect both their own self-interest and the public interest, thus reversing the inevitable historical trend into a collapse:
Stocks: Syngenta /quotes/zigman/270167/quotes/nls/syt SYT +1.80% , Monsanto /quotes/zigman/267799/quotes/nls/mon MON +0.34%
The United Nations calls the global food crisis a "silent tsunami." Two billion people, mostly poor, depend on fish and other wild foods for protein. Their supplies have "collapsed or are in steep decline," forcing use of costly animal proteins. The rise in food prices is making it worse for billions living below poverty levels.
In "The End of Plenty," National Geographic warns "synthetic fertilizers, pesticides, and irrigation, supercharged by genetically engineered seeds" is failing. A joint World Bank/UN study "concluded that the immense production increases brought about by science and technology the past 30 years have failed to improve food access for many of the world's poor." Time warns that our "addiction to meat" has led to farming that's "destructive of the soil, the environment and us."
Funds: Ceres Partners , Chess Capital Partners
Crop soils are "being carried away by water and wind erosion at rates between 10 to 40 times the rates of soil formation." With forests, the soil-erosion rate is "between 500 and 10,000 times" the replacement rate, a trend accelerated by today's new age of the 100,000-acre mega fires. Ceres and Chess are hedge funds that own many small farms.
Stocks: Kimberly-Clark /quotes/zigman/231291/quotes/nls/kmb KMB -0.40% , International Paper /quotes/zigman/230211/quotes/nls/ip IP -1.00%
We are destroying natural habitats and rain forests at an accelerating rate. Half the world's original forests have been converted to urban developments. A quarter of what remains will be converted in the next 50 years.
Stocks: DuPont /quotes/zigman/225806/quotes/nls/dd DD -0.15% , Molycorp /quotes/zigman/595467/quotes/nls/mcp MCP +1.91% , Dow Chemical /quotes/zigman/224698/quotes/nls/dow DOW -0.49%
Our solutions often create new problems. Consider the deadly impact of insecticides, pesticides, herbicides, detergents, plastics. The list is endless. For example, industries "manufacture or release into the air, soil, oceans, lakes, and rivers many toxic chemicals" that break down slowly or not at all.
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Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The... Expand
Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The Millionaire Code," "The Winning Portfolio," "The Lazy Person's Guide to Investing." Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology. Collapse
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