Saturday, August 25, 2012

Video: Doug Casey on Speculation and the US Dollar

There are three investors whom I like to emulate, they are Dr. Marc Faber, Jim Rogers and Doug Casey. Their common denominator are that they are staunchly free market advocates and are global citizens.

The two videos below are interviews with Doug Casey which had been recently held in Canada.

10 Tips on Speculation and Life



Some notes of the interview

-The importance of clear definition of terms
-Understand counterparty risks
-Understand and take contrarian position
-Expanding one’s knowledge horizon by investigating beyond the topic interests by reading further. In short take a comprehensive research on areas of interests
-Doug says “I’d rather be lucky than smart”, he also says “make your own luck” (I’d say this resembles Nassim Taleb’s black swan theory)
-Diversify internationally
-He likes Thailand but sees the country as not friendly to immigrants
-Doug says "You don’t want be a resident anywhere", which means we should be responsive to political risks

Why the Dam is Finally Breaking on the US Dollar


Some notes of the interview:
-Doug is a long term bear of Europe largely due to the popular destructive ideas of statism
-Despite the rhetoric, in the political spectrum both the leftist and rightist camp disdain social and economic freedom
-The US international reserve status is crumbling: Dam is breaking
-Blocking or cutting Iran out of the SWIFT system (using the US dollar for its oil trades) only gives the incentive for nations to shift out of the US dollar trade.
-The world will go back to gold.
-Monetary reforms could mean gold will be used as currency for international trading but domestic economies will remain fiat based
-Gold is not an investment, gold is money
-US elections: No discernible difference between two candidates, both are statist
-Major asset of Canada’s central bank is the US dollar, thus, what happens to the US dollar will affect the Canadian dollar. Doug says “The best thing about Canada is that Canada is not the US”
-Doug encourages people anew to be flexible in terms of living. He says that we should not adapt the "medieval peasant attitude" of being a "vegetable" (sticking to a single place), as the “vegetable" outlook is not a good survival strategy
-Doug says he likes to be paid for a high standard of living.
-Doug is ambivalent on commodities over the long term, because longest bearmarket in history is in commodities. This is largely due to the advancement in technology.
-Mining is a risky business. Legal, environmental and industrial costs are as expensive as mining engineers
-Government and environmentalists sees mining as a cow to milk
-Everybody hates mining
-Gold stocks are speculative
-Though bearish long term he endorses buying on gold and silver
-He says that there will be bubbles in different markets around the world (I agree, ASEAN is one)
-Gold might become a bubble
-Mining stocks could also become a bubble
-Doug believes in the cattle (and agricultural) business
-Doug thinks that the over expanded financial industry is bound for a collapse
-Like Jim Rogers, he thinks that farmers will become millionaires while financial executives will become paupers.

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