Is It All Doom and Gloom…Or is There Hope?

As you may already know, on Thursday and Friday of this week, Port Phillip Publishing held their ‘Paradox of Prosperity’ conference.

And so today, I thought it’d be only fair to let you in on a bit of the information we learnt while we were there.

We had many of our in-house editors presenting, as well as some interstate and international guests.

Much of the world is currently a bit doom and gloom when referring to the stock markets. Our speakers presented thoughts and ideas that weren’t necessarily optimistic, but they shed a bit of light that might make the future less daunting.

Let’s take a look at what they had to say…

The ‘Paradox of Prosperity’

Kicking off the presentations was our very own Vern Gowdie. Vern is the Editor of The Gowdie Letter and Gowdie Family Wealth and also author of the book The End of Australia. He spoke about how economic growth in Australia is a Ponzi scheme. Nearly 1% of our annual economic growth comes from immigration. This adds productive-age people to our economy, without the costs or time needed to raise them. But if most or all of our growth comes from here, then the only way to keep the economy afloat is to bring in ever-more people every year. Long term, it’s unsustainable.

That’s not the only thing that Vern argues is unsustainable about Australian growth. He touched on public and private debt levels, interest rates, and asset prices. All to paint a frightening picture of an economy teetering on the edge.

Then, surprisingly, Vern ended on a positive note. One more opportunity to come. We won’t give it away here though. If you weren’t able to attend Paradox of Prosperity, it’s not too late to secure a ‘digital seat’. More on that shortly. But first…

Tim Murray, co-founder of J Capital Research, was up next. He discussed the high debt China is currently facing, as they add more debt per year than GDP growth. A problem like that would usually be solved by market forces, but this is not possible in China, where the largest companies are part or fully government owned, and cannot be allowed to fail.

Having lived and worked in China for over 20 years, Tim Murray was able to bring unique insights into conditions on the ground. Some of his revelations were shocking, especially where the realities of events contradicted the official story…

Dr Marc Faber (nicknamed Dr Doom) was the keynote speaker at this year’s event. He very clearly stated that Millennials are the first generation ‘in the history of capitalism’ who will be worse off financially than their parents. Explaining why became an exploration of government incompetence, market forces, and the end of Western economic and cultural supremacy. China was a major focal point of Dr Faber’s presentation. His conclusions about the Middle Kingdom provided a fascinating contrast with that of the earlier speakers.

Marc Faber at the Paradox of Prosperity conference

Marc Faber at the Paradox of Prosperity conference

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After lunch on Thursday, Jonathan Pain took centre stage to discuss global inflation. Now, most of our guests at this stage of the day had been very bearish and didn’t see much hope for the stock and housing markets or the global economy. But Jonathan provides a different perspective. He believes that the global economy is set for strengthening growth. He believes that very strong secular forces, with all things being equal, will drive up inflation throughout the world.

Jonathan Pain at the Paradox of Prosperity conference

Jonathan Pain at the Paradox of Prosperity conference

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The man who forecast the 2008 Global Financial Crisis, Gerard Minack, was the final speaker for day one. In his presentation, Gerard discussed why he believes investors such as yourself may actually have an advantage over professional investors. He believes inflation will decrease due to an ageing population. And he doesn’t believe that’ll change any time soon. While cycles will and always will continue, secular trends have the upper hand.

 Gerard Minick at the Paradox of Prosperity

Gerard Minick at the Paradox of Prosperity

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Kicking off the second day, Dr Jim Walker, also discussed China. However, his outlook wasn’t as bleak. While a lot have theorised that China is in decline. Dr Walker has a different idea. He believes that China will continue to grow a strong economy and be a major world exporter.

Throughout the conference there were also presentations by Port Phillip Publishing editors Greg Canavan, Sam Volkering, Jason Stevenson and Phil Anderson. These included more intimate breakout discussions, which allowed our editors to show their investment concepts in layman’s terms. Helping attendees translate these ideas into their own investing.

There was so much information shared at the conference that we just can’t share it all with you in one article. If you’d like to hear everything our guest speakers discussed, and get behind the scenes access that even our attendees didn’t witness, it’s not too late. Go here to find out more.

This Week in Money Morning

In Monday’s Money Morning, Harje was onto day two of his Extreme Small-Cap Profits email course. And today, Harje delved further into the world of small-cap stocks. Harje explained why small-cap stocks are nearly impossible for big money to touch. To find out why he considers small-cap stocks a gold mine for investors, and to learn why big money can’t touch small-caps, go here.

In Tuesday’s Money Morning, Harje looked towards not only small-cap, but also mid-cap and blue chip stocks. He especially looked in detail at the returns of mid-cap stocks. He used companies such as a2 milk as an example of how well mid-sized stocks can do. Harje also looked at large blue chip stocks, but they didn’t have the same excitement around them. To find out why, click here.

On Wednesday, Harje discussed the fact that investors, even Warren Buffett, cannot predict the future regarding where a stock will be in the future. Therefore, you should learn to limit your losses. As Harje explains, many investors will throw thousands into the share market on one company. This could ultimately lead to your downfall. To find out more on how to protect yourself from huge losses, go here.

In Thursday’s Money Morning, Harje dived into day five of his Extreme Small-Cap Profits email course. Harje explains where you could hunt for promising stocks. And he enlightened readers on how to read and look for stocks that could potentially explode. To find out more about how you could find potentially exploding stocks, go here.

In Friday’s Money Morning, Harje reveals day six of his Extreme Small-Cap Profits email course. Harje explains to readers the most valuable part of a company when deciding whether to invest or not. And that would be earnings. He uses real life stocks to explain his reasoning. To find out more behind Harje’s reasons and what you should never do when investing, go here.

Kind regards,

Alana Sumic,
Editor, Money Weekend

Alana Sumic is part of the editorial team here at Money Morning. She contributes to bringing you Money Morning each day, along with all of Fat Tail Investment Research’s many other publications.

As the Editor of the weekend edition of Money Morning Alana brings you a summary of the news for the week, and her own take on the week’s most important story in markets. She is also a writer and editor for Fat Tail Investment Research’s political publication, The Australian Tribune.

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