On the Origin of Baguettes

If you’re in Melbourne, or plan on coming to town for the Melbourne Cup racing carnival, consider hanging around for a few more days…

Fellow Money Morning editor, Sam Volkering, and I are presenting at the Precious Metals Symposium on Friday 10 November, at Pullman on the Park on St Kilda Road.

Industry heavyweights Eric Sprott and David Morgan will also be there, along with a host of other speakers, and loads of precious metals companies presenting their stories.

Gold is off most people’s investment radars right now. And when something isn’t popular, there is usually value to be found. The Aussie dollar gold price is around $1,660 an ounce. Well run Aussie gold miners are making good money at these prices. Yet the market isn’t really interested. It’s all about Bitcoin and cryptos.

Which is where Sam comes into it. He’s hosting a special session on Gold and Cryptocurrency on day two of the conference.

It should be a great few days. This is not a Port Phillip Publishing event, but I have arranged with the organisers to give you a 10% discount should you decide to go along.

Simply go here and click on ‘get my ticket now’.  Then click on ‘enter promotional code’ and type in PORTPHILLIP10 to secure your discount.

And by all means, come and say g’day if you see me wandering around.

Here’s another tidbit of information you might find useful…

I very rarely watch TV. But occasionally a gem comes along that is worth mentioning. I recently stumbled upon Bon Appetit! Gerard Depardieu’s Europe, on the SBS Food channel.

It’s a delightful series, and on the weekend it illuminated me on the origins of the baguette.

Apparently, when the French metro was being built in the late 19th century, workers from many different regions of the country all contributed to the construction.

Typically, rivalries ensued. Each man had a knife to cut his bread, and these were also used as weapons in the regular fights that broke out.

The builder, worried about the constant bloodshed (and no doubt the delays) asked the local bakers to make a thinner, longer loaf that the men could break with their hands, allowing them to leave their knives at home. Et voila, the baguette came into being!

So there’s a little story you can tell friends next time baguette’s are on the menu… 

Speaking of petty knife fights, what is going on with our political system?

The Aussie market sold off on Friday afternoon after the High Court ruled that deputy PM Barnaby Joyce was ineligible for Parliament, a result of him being a dual citizen.

Now he has to stand for re-election on 2 December.

Seriously, what a farce. Is this what happens when you live and govern by the letter of lawyers’ words rather than common sense?

It’s hard enough to govern this country as is. Now, for the next month at least, it will be that much harder. The government’s majority was already a slim one. But with the juvenile Labor party looking to take advantage of the ruling, we could be looking at the prospect of a breakdown in the management of the country for the next month.

We have a bunch of petulant lawyers in parliament doing what they can to spite the opposition and win the power struggle. As Alan Kohler writes in The Australian:

Australia’s governments all hate each other, the major political parties are engaged in “total opposition”, which brooks zero co-operation and the prospect of full policy flips every three years, experts are routinely ignored and regulators are either lazy or out of control.

In other words, the business of government in this country doesn’t work and hasn’t been working properly for about a decade.

Friday’s political led sell-off will be erased this morning, though. Tech stocks were on a tear in the US on Friday, and the bullish mood should translate into strong gains for the Aussie market today.

From the Financial Review:

Strong results from Amazon.com, Alphabet, Microsoft and Intel were all that the bulls needed. Amazon surged 13 per cent, and in the process making founder Jeff Bezos the world’s richest person at $US93.8 billion – more than $US5 billion clear of Bill Gates.

Intel gained 7.4 per cent, Alphabet 4.3 per cent and Microsoft 6.4 per cent. Strong pre-orders for the new iPhone X paved the way for a 3.6 per cent rise in Apple.

“There’s not a lot to stop this market right now,” Stephen Auth, chief investment officer at Federated Investors, told Bloomberg. Mr Auth, who said he was a “long standing bull”, said tech earnings were the last “component needed for a melt up”.

Is this the start of a melt up…or close to the end?

No one knows the answer to that. But I can tell you there isn’t a great deal of value in the big US tech stocks anymore. This is a momentum game, a fear of missing out, a ‘pay up now because future growth will deliver’ rationale for investing.

That might make sense in the here and now, but as often happens, hindsight will likely prove it to be flawed analysis.

Regards,

Greg Canavan,
Editor, Crisis & Opportunity


Greg Canavan is a Feature Editor at Money Morning and Head of Research at Port Phillip Publishing.

He likes to promote a seemingly weird investment philosophy based on the old adage that ‘ignorance is bliss’.

That is, investing in the Information Age means you have all the information you need at your fingertips. But how useful is this information? Much of it is noise and serves to confuse, rather than inform, investors.

And, through the process of confirmation bias, you tend to read what you already agree with. As a result, you often only think you know that you know what is going on. But, the fact is, you really don’t know. No one does. The world is far too complex to understand.

When you accept this, your newfound ignorance becomes a formidable investment weapon. That’s because you’re not a slave to your emotions and biases.

Greg puts this philosophy into action as the Editor of Crisis & Opportunity. As the name suggests, Greg sees opportunity in a crisis. To find the opportunities, he uses a process called the ‘Fusion Method’, which combines traditional valuation techniques with charting analysis.

Read correctly, a chart contains all the information you need. It contains no opinions or emotion. Combine that with traditional stock analysis and you have a robust stock-selection strategy.

With Greg’s help, you can implement a long-term wealth-building strategy into your financial planning, be better prepared for the financial challenges ahead, and stop making the basic, costly mistakes that most private investors do every time they buy a stock.

To find out more about Greg’s investing style and his financial worldview, take out a free subscription to Money Morning here.

And to discover more about Greg’s ‘ignorance is bliss’ investment strategy and the Fusion Method of investing, take out a 30-day trial to his value investing service Crisis & Opportunity here.

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