11/18/2010
December 3, 2017
11/08/2010
December 3, 2017

11/11/2010

I’m in Vancouver. Finally on the way home…


Kuppy
After thinking of other potential stocks and themes to play that benefit the feds money printing and the inflation we will probably see I’m wondering your thoughts on companies like Visa/Mastercard,etc. If our currency falls, we make more, spend more, prices rise even though we are running in neutral. For companies like Visa, they get a %of the transaction and if prices rise generally wont that mean they get more revs from the same general level of purchasing? And they operate on fixed costs and only have marketing costs that will rise so generally Id think thats good for margins and revs. Is that a fair assessment? thanks

It’s hard to predict what might happen to margins. Who would have thought that inflation thus far would actually HURT gold miners because their costs have gone up more rapidly than the price of gold. It should work that way, but there are lags of course. It should at least protect you from inflation.


Kuppy you say : We are about to have a massive worldwide bubble in every asset class.

response / question : Doesn’t every
“taxi driver” know about QE2 by now, so maybe the response is baked in already ?
thanks…

It could be partly baked in, but that might just be the knee jerk reaction to this. The fed has said that they intend to destroy our currency and create asset bubbles. They’ve litterally come out and written an op-ed to say that. The only thing the Fed has ever done successfully is to create bubbles and devalue the currency. I think they will succeed beyond their wildest dreams. Meanwhile, you say that every taxi driver knows about QE2, then why do they keep putting more money into bond funds? Do they not realize that bonds are the asset class that you least want to own? I think that this is one of those situations where no one is really positioned right except a few hedge funds.


Thank you for responding to my question.  I’m not sure at this time what type of manufacturing business I want to establish in the future.  I am 24 year old business buff and I’m waiting for my brother to finish school.  My brother is studying business with a minor in Mandarin.  I’d like to set up some type of manufacturing business either in the US or in China.  Whatever product I manufacture, I want to mainly target the Chinese market and other emerging markets.  I’d like to set up a business in the US since our country really needs to grow our manufacturing base.  Like you said, I guess it just depends on what kind of product I decide to manufacture.  If I decide to produce a more standardized product, I will have to target a location with the cheapest labor.  I’d like to manufacture a good quality product that is reliable. I have no clue what I would manufacture just yet.  Once my brother becomes pretty fluent in Mandarin, our options will open up with what kind of business structure we want to set up.

Do you think I’m on right track with my thinking for a business?

I think the most important thing for you would be to go work someplace for a few years and learn the details of manufacturing. It’s nearly impossible to just open a factory from a cold start. You need the knowlege base needed to run the factory. Then figure out where you want to put it. By the time you’re ready to do this, I’m sure the world will look very different again.


was just looking at the vxx. did the etf do a reverse spilt?

Yes they did. It’s a 4:1 reverse. I just updated my positions mentioned cost basis. Thanks for reminding me.

I recently added to this position. It’s nearly dropped in half and I want to keep a constant (though small) weighting. It’s the gift that keeps on giving. See you at zero.


Great job on gold. What’s the next trend to play?

Next trend? This trend is nowhere near done. We’re just about to get to the real lucrative mania part of the trend. Trends last for years, decades even. When you’re on the scent, you don’t want to go searching for something new. There may be setbacks, gold can drop 20% at any time, but gold is going much higher before we see the top. Investing is about patience. A few month move in gold isn’t a trend, it’s noise.

If you want a second trend, look at the guys who do mining exploration work for juniors. I’m in Vancouver. These guys are raising so much money that they don’t know what to do with it all. There will be stunningly large exploration budgets for 2011. Currently, most work is being done by majors. By next year, the split will be much more similar to 2007/2008. That creates huge increases in margins for everyone helping companies explore. I had lunch with Fred Davidson from Energold. Business is booming. Talk about a trend that will go for years…These mining companies are getting desperate to find ore. They have no choice but to spend on exploration. Find the trend and play it.

There just aren’t that many really great trends in the world where investments are priced attractively. When you have one, stay with it and capture the big moves.


http://www.youtube.com/watch?v=fX1EWYaKOck&feature=player_embedded#

This is a bit long, but brilliant. Jim Rogers is always brilliant,

Kuppy