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Monday, April 27, 2009

There is no such thing as a sure bet on wall street

I have blogged many times that the safest, best long term investment is natural resource based stocks. I still believe this is true whether it be Gold Miners, other precious metals, Oil ETF's such as USL, Oil companies, and food companies and ETF's such as RJA and DBA.

However, there is no such thing as a sure bet. My view is basically based upon the financial crisis the world faces, and the current world policy of printing money to resolve the worlds problems. This will result in higher resource prices. Also, if I am wrong, and the world economy recovers, India and china (2.3 Billion people) will need more resources, again, resulting in higher resource prices.

However, keep in mind, other earth shattering events can happen to make this bet a bad bet. For example, in Mexico there is a possible pandemic brewing involving the Swine Flu. If the Swine, Bird, or other flu turns pandemic, and assuming you survive, natural resources may not be a good investment. With a severe decrease in population, resources may take years to become in demand. I obviously believe this to a be a low-risk possibility, but it's kinda like the green zero on the roulette wheel, a slim chance just enough to throw off the odds when betting on red or black.

In the last major pandemic in 1918, where 50 to 100 million people died in 6 months, the landscape of the economy today would shift in ways that can't be predicted. None of this has to occur, but the FEAR of it is enough to move the markets.

I do advocate not only being prepared for the financial firestorm, but also for personal/family preparedness. One thing to consider is buying N100 masks today, before a shortage can occur. May sound alarmist, but 50 buck investment for piece of mind is hardly throwing away money. Worst-case use some masks next time your painting. :)

Think the medical establishment can prevent a pandemic? The CDC has stated it would take months to get a proper vaccine for protecting from a pandemic. Considering the global travel profile, and that in 1918 the virus then hit 5% of the global population in under 6 months, it isn't hard to imagine that a vaccine just isn't possible once a pandemic starts.

UPDATE: 4-29-09 - can order Tamilfu clicking here
Blog on swine flu news click here, CDC Swine flu facts here

The moral of this story is always leave plenty of room for the unexpected, it always happens when you least expect it. :)

2 comments:

  1. Hi SurfinMurf- The flu does not normally occur in warm weather places like Mexico. Mexican's immune systems have not been exposed to the flu so they get hit hard. As for the US & CAN...we probably had the swine flu this yr already. Our population gets sick 4 a week or 2 and then recovers. Influenza kills about 40k people each yr. So i wouldn't buy those masks just yet. (maybe you are long a mask co. lol) -Bio degreed follower.

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  2. hehe, like I said Al, I doubt anythng bad will happen with the swine flu hype.

    BUT a pandemic is LOOONG overdue. And I for one believe the odds say a pandemic will hit the world sometime in the next 20 years, if not 5.
    The masks will not go bad :)

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