Saturday, June 14, 2008

Cramer Is Wrong. Or Maybe I Am.

I don't remember being in such disagreement with Jim Cramer. He's pimping energy, commodities, ag and "New Tech". I don't think either of these has long term (more than a year) growth perspective. Most agricultural product prices are going down (corn is an exception, so far). Most metals are going down right now too. Energy (oil first of all) is holding, but oil's parabolic chart is screaming "Bubble!". Increased volatility on oil market lately might be a sign of turn, like it was for gold. And his last thesis, international exposure, doesn't hold up, because dollar is going up against all currencies lately.
Maybe Jim is right, and his ideas might work for a while. Maybe they will work for a long time, which goes against everything I know about economy. The main theme in economy for the last 200+ years: human capital is becoming more expensive compared to commodities.
I have big exposure to international companies right now. I think of moving more to US based companies. I'm going to reduce exposure to anything related to commodities.
Still looking for big ideas related to the next big shortage, shortage of labor. World needs big innovations to feed, upkeep and support aging population with less workers. There is no way around it, we have zero growth, and, in some areas, negative growth of population. That's almost everywhere in the world. Of big regions, only Africa still has high population growth rate.
Another theme: shortage of IT workers. It might seem surprising. Many people think that India can supply unlimited numbers of programmers to the world. Wrong! India right now can't even supply enough for itself. I'm amazed at what I see in IT departments in US right now: most people there are over 40! OK, that's with exception contractors from India, but it's probably first time in history when IT workforce is aging. There should be some money made on this trend, I just don't know how. Yet.

Euro 2008 is wonderful. Van Basten was the greatest striker I've ever seen, I'm starting to believe that he's a great coach as well. Too early to say, of course. We'll see.

Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.

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