Plan now for "a breakdown of the civilized infrastructure" warns hedge fund guru Barton Biggs in his bestseller "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 with guns and ammo, Biggs recommends: "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, Biggs made Institutional Investor magazine's 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.
Doomsday capitalism: Get rich fast; ignore the coming collapse
Biggs invests money for the super-rich, guiding them on how to invest today, as well as how to stockpile wealth and assets in preparation for a "breakdown of the civilized infrastructure." Biggs is a textbook doomsday capitalists, 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 capitalist short-term strategy. But should you ignore future consequences because you know you won't be around later, or hope new solutions will emerge through new technologies?
Well folks, if Biggs can successfully invest 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." The author warns that throughout history politicians routinely fail to plan or act in time to avoid a collapse. But 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 historical trend into collapse.
Here are a dozen areas for further exploration:
1. Food
Stocks:Syngenta (SYT, news) and Monsanto (MON, news)
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" are 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. Modern techniques have led to farming that's "destructive of the soil, the environment and us," Doug Gurian-Sherman, a senior scientist with the food and environment program at the Union of Concerned Scientists, tells Time magazine.
2. Farmland
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," Diamond warns in "Collapse." With forests, the soil-erosion rate is "between 500 and 10,000 times" the replacement rate, he estimates -- a trend accelerated by today's 100,000-acre megafires.
Ceres and Chess are hedge funds that own many small farms.
Additional stocks mentioned in this article: Kimberly-Clark (KMB, news), International Paper (IP, news) and DuPont (DD, news).
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