| Friday, July 26th, 2013 | | | | | | | Making Money In Farmland, Without Owning a Farm | | | By Jim Amrhein
Day three of the last Agora Financial Investment Symposium
Vancouver, British Columbia
Dear Reader,
In his opening remarks, AF's Chris Mayer called today the "money day" here at the Agora Financial Investment Symposium…
And for good reason.
Historically, Thursday is the meatiest day of content, in terms of specific takeaways that attendees (or those who get our event coverage) can make money from.
That's because, by this time in the event, the theme has been firmly established and explored…
And the more futuristic, broad-view speakers yield the stage to the fast-ballers with specific moneymaking moves for right now.
This "last hurrah" event is no different. So no warm-up color for you today.
No anecdotes about wildlife, heights, food, drink, massages — or making an ass out of myself at the swanky Agora Financial Reserve event (which I did in both 2011 and 2012, as you may remember)...
And I promise: No more pictures of my legs.
I took enough ribbing over that to turn me red for a month. I just ran into Addison on the conference level and he said, "Thanks for covering up."
Jeez. You'd think I'd pulled an Anthony Weiner or something!
So no high jinks today. Instead, I'm just going to give you the raw meat, so to speak.
And fittingly enough, that starts with one of this show's longest-running and favorite speakers — talking about one of my favorite things, and yours, no doubt…
Frank Holmes — The World of Gold
OK, I don't know about you, but I'm dying to hear what people who really know something about money and markets think about the near future of gold…
And judging by the attendance at Holmes' presentation, I'd say the same thing is on just about everyone's mind here at the Symposium.
For those who don't know, Holmes is the CEO and Chief Investment Officer at U.S. Global Investors…
And his personal specialty is gold investing.
In fact, as co-author of 2008's The Goldwatcher: Demystifying Gold Investing, you could say he wrote the book on it.
Now, in the interest of full disclosure, I have to tell you something right up front…
Every time I've ever heard Holmes speak at this event, I've immediately wanted to rush out and load up on bullion. Even last year — when it was at $1,600 an ounce.
That's how unassailable his logic is in presenting gold as the no-brainer investment of all of our lifetimes.
And this year's presentation was no different.
In fact, I defy those of you who see AF's new video coverage of Holmes' speech NOT to start stockpiling all the gold you can get your hands on.
Like I said, his position is damn near irrefutable — especially with all the incredible charts, graphs, and slides he put up on screen as proof.
(Side note: One of these slides, involving President Obama and Thailand's comely new PM, Yingluck Shinawatra, got the biggest laugh so far this week. It's priceless.)
Now, it would take me a week's worth of dispatches to fully explain all the info in these graphics to you, but let me just hit some of the high spots for you…
According to Holmes, both short and long term, gold is driven by two basic factors.
One of them is the "fear trade" — which I'm sure you already know about.
That's when people or pension funds or governments or speculators buy gold as a hedge against declining currency values, currency instability, or in times of crisis.
But there's another gold-market that most investors don't fully understand, if they understand any of it at all…
It's the "love trade."
No, that's not what Doug French was alluding to in last night's Whiskey Bar — when he postulated that Vancouver's ladies-of-the-night might work for frozen turkeys…
It's what Holmes calls the largely Asian (Chinese and Indian) demand for gold that's earmarked for use in jewelry and other such gifts.
According to Frank's unimpeachable numbers, this aspect represents 50% of global gold demand — and will only get higher as time goes on.
Why?
Because of growth in the emerging markets.
"As you listen to me speak, I would remind you that in the other half of the world," Holmes explains, "there are 100 million people having sex."
And all those resulting babies — and their parents — are going to want all the things that we westerners have. The numbers are compelling…
"In 1972, 'Chindia' had only 2% of the world's GDP," Frank explains. "Now it's over 20%."
And that same kind of economic expansion is happening right now in any number of other emerging markets…
Many of which give and save gold as a staple of their culture.
In his chart at around 23:30 into his presentation, Holmes shows us the rapidly changing GDP dynamics between E7 (emerging) and G7 (developed nations).
And it illustrates just one of several reasons why Holmes believes you should buy gold now. I'd go into all these for you, but I'm already running long in this section...
But remember, Frank's whole presentation — charts, laughs and all — is just a click away, as part of AF's coverage of this final Symposium.
(Editor's Note: For the next four days you can claim ALL the conference recordings for a full HALF-OFF the normal price. Click here to grab your recordings.)
Now let's move on to another Symposium favorite…
Chris Mayer — People, not Personnel: A Tale of Two Americas
You gotta love Chris Mayer.
He's just the most down-to-Earth, unassuming, and likeable guy…
Not to mention one of the most successful investors at this show, year after year.
In fact, his Capital & Crisis newsletter has posted annualized gains of over 15% per year since its inception — and through markets thick and thin.
That's nearly twice the returns of the major indices, over time.
This is one reason why Mr. Mayer almost always plays to a packed house here at the Symposium. Another reason is the sheer uniqueness of just about everything he says.
Case in point:
"Whether you're 'people' or 'personnel' is not really tied to your title or function," Mayer said, shortly after opening his speech. "It's more about how you behave."
To make this distinction clear, Mayer uses the controversial American whistle-blower, Edward Snowden…
 However you classify Snowden personally — hero or traitor — Mayer's point is that his behavior is what classified him as a "person" or as "personnel."
"When he was working on that NSA contract," Mayer elaborated, "he was just a functionary, he was 'personnel' just doing what he was told…"
But when he stepped out of that role and became a whistleblower, and took responsibility for his actions…
That's when, under Mayer's premise, Snowden became a "person."
The point is, 99% of investors don't realize is how important a role this fiercely individual, creative, "personhood" aspect plays in dynamic, profitable companies.
The kinds of companies you want to invest in.
"I'm going to recommend… that you stick with those firms that are still run by people," Mayer continued. "Where they'll still tend it, and have a stake in it."
To support this assertion, Chris cites no less than four independent studies showing the competitive advantages that owner-operated companies (run by people) have over "agent operated" companies (run by personnel).
He also ran us through case studies of four model owner-operated firms: Howard Hughes Corporation, Covanta, Kennedy Wilson, and the Retail Opportunities Investment Corporation.
As if that weren't enough to get us on board, Mayer highlighted a number of other advantages that owner-operated firms have over their agent-operated cousins…
Like their tendency to aggressively grow their businesses in lean times — as opposed to sitting on capital.
And the built in, market-cap-based accounting advantage that owner-operated firms have over their agent-operated peers.
Now, this just scratches the surface of Chris's presentation.
There's also his great chart on the "Dirty Secret of the S&P 500" (at around 11 minutes in)…
His riff on the genesis of his "people vs. personnel" idea — a little-known book by the late Paul Goodman…
And his analogy contrasting the Peace Corps with the lesser-known American Friends Program — as it applies to "people" and "personnel."
Plus a lot more.
But I know you want me to cut to the money shot, so here it is…
Toward the close of his speech, Chris recommended two "owner operated" companies that are both superstars in their respective sectors.
One of these is a health care up-and-comer that has built itself into a billion-dollar company since 2006…
The other is a lean, mean real-estate player aiming to hit $3 billion in market-cap by the end of next year.
According to Chris, one of these companies could realistically score investors 50% by Q1 of 2014, based solely on reasonable valuations.
The other could easily post gains of 60% or better, plus a 6% yield.
Now, Bruce and Addison have forbidden me from revealing their names and tickers in these dispatches. It simply wouldn't be fair to paid Symposium attendees.
But you can get them — along with everyone else's recommendations, too…
In any of AF's coverage options for this event, either audio-only or high-def video.
OK, let's keep the moneymaking momentum going here…
Richard Lashley — The State of the Banking Industry and Opportunities in Bank Stocks
Banks aren't on many people's "like" list right about now. Everybody seems to have an axe to grind with them.
For their policies. For their bailouts. For their outsized profits.
But according to Richard Lashley, co-founder of Baltimore's PL Capital, LLC, if we like making money…
We might want to stop hating on the banks. And start hitching up to them for some hefty gains.
Lashley's presentation started with the story of why he left the banking industry to start PL Capital — a firm that specializes in investments in the banking sector...
The story took place in a meeting he was in while working in banking Mergers & Acquisitions in the 90s.
In the middle of an acquisition transaction, Lashley heard the CEO of the buying bank (whom he was representing) talking to the CEO of the selling bank…
And explaining how his bank is run for the benefit of the management team and Board first, then the employees, then the customers — and his shareholders last.
"Something about that just grated me so much," said Lashley, "A light went off in my head, and I said 'I can't do this anymore.'"
The very next year, Lashley was supervising bank acquisitions for his own firm.
Today, he's one of the banking industry's best-known "shareholder activists."
You can tell that Lashley has real conviction about shareholder advocacy when you see his presentation…
But that's not all you see. You also see a veteran banking insider who knows all the ins and outs, at every level of the industry — from the mega banks to the Savings and Loan on the corner of State and Main in your hometown…
This is apparent by the incredible array of visual aids Lashley scrolled through in his rapid-fire presentation.
I counted at least 30 slides, 15 or 16 of them with charts and graphs.
Just the names of some of these charts give you the gist of Lashley's presentation better than my ham-fisted words ever could. Here are just a handful of them:
- The Size of the U.S. Banking Industry is Reasonable Compared to Other Countries
- The U.S. Banking Industry Has Grown in Absolute Size but Shrunk in Relative Size — We Need More Big Banks, Not Less
- These Big Well-run Banks Made Money Each Year During the Financial Crisis
- The Impact of the Financial Crisis on Banks has Passed
- The Impact of QE and Low Interest Rates on Banks is Mixed
- Banks Stocks are Cyclical, The Downturns are Sharp and Short, While The Recoveries/Upturns are Longer
What's Lashley's "umbrella" point with all these charts, you're wondering?
"The U.S. banking system is in much better shape than is commonly believed," says Lashley. "[It's] not as heavily leveraged as you think it is."
That means it's time to jump in and make some money off the banks that have made so much money off you in the past…
In fact, according to Lashley, there are four specific reasons why NOW is the best time to buy bank stocks in the last 30 years (yes, these are in the videos).
But beware — not all bank stocks are good investments.
In fact, there's one common type of bank stock you'll want to steer clear of entirely.
And there are some other expensive pitfalls you'll want to watch out for, too.
You know the drill, though — I can't just give these tips away…
Or the three specific recommendations Lashley made for playing the banking sector right now…
When people at the Symposium have paid as much as $800 to get them firsthand.
But it's a small matter to get all of this information for yourself — by signing up for AF's audio and video coverage of this event.
(Editor's Note: Until Midnight, Tuesday July 30th, you can grab FULL access to all the conference recordings at the lowest available price. Click here for details.)
I'll show you how you can do this in just a moment…
Or you can click on the blue "live links" they've been embedding in these dispatches.
Right now, though, it's time to move on to another potentially HUGELY lucrative opportunity…
One that went public just four days ago.
Brad Farquhar — Investing in Farmers, the Ultimate Price-Takers
I didn't think anybody could knock Barry Ritholtz off the "favorite presentation" pedestal in my mind…
But for me, Brad Farquhar's Thursday afternoon speech is now the new heavyweight champion of Symposium presentations.
And it's not just because I love farms.
Sure, I grew up hunting, fishing, shooting .22s, and riding dirt bikes on farms in my hometown areas…
And I live in the country, surrounded by farms now. Wouldn't have it any other way.
But other than becoming a farmer (which I've been tempted many times to do), I've never imagined a way that I could make money from farming.
Until this year, thanks to Brad…
The way he's figured out how to do that is one of those ideas that's so simple and pure, you'll be kicking yourself for never having thought of it.
Now, Brad's presentation — another graphically heavy one — is chock full of facts, stats, and graphs proving why agriculture is going to be the winning sector of the foreseeable future.
Things like population growth, emerging market income growth, increased meat consumption, decreasing arable land acreage, increasing costs, falling dollar, etc…
He even showed us five different ways we could make money on the coming boom in agriculture.
But the mind-blowing part is what Brad's new firm has figured out how to do.
What they're doing, for the first time ever…
Is taking a proven mechanism of huge returns in the mining industry, called "streaming," and applying it to agriculture.
Why hasn't anyone thought of this before?
 "Most institutional investors don't know very much about primary agriculture," says Farquhar.
Now, if I understood Brad correctly — although I was furiously scribbling notes, so I might have gotten some of the little stuff wrong…
The principle behind streaming is actually pretty simple.
The "streamer" (Brad's new company) partners up with a farmer and gives him a lump sum of cash…
In exchange for the right — but not the obligation — to purchase a percentage of his crop at a below-market price, at a certain point in the future. Kind of like an option.
Why would a farmer agree to this arrangement?
Because although farmers are among the richest groups on Earth from a material wealth perspective…
"Most farmers are vastly undercapitalized from a working capital perspective," says Farquhar.
"Farmers are the wealthiest group, on average, in net worth," he continues, "But they are asset-rich and cash-poor."
So for farmers, borrowing operating capital — without having to mortgage any of their land or equipment — makes sense, even if it costs them as much as 20% of their crop yield.
Why?
Several reasons…
With ample cash in hand, farmers can buy things like seed, fertilizer, and equipment cheaper (like during off-peak or surplus times, or in bulk).
And with a sufficient operating budget, farmers can also get 9% - 12% more for their crops on the market…
Because they can afford to store their crop yields, and wait for the most opportune times to sell.
It's a brilliant business plan — a true "win-win" for all concerned.
Now, I'm going to do something I've never done before in these dispatches…
I'm going to take off my "reporter" hat and make a recommendation to you readers.
That recommendation: Buy shares in Brad's new company now.
Look, I've been bopping around the alternative financial business now for a decade. I've borne witness to the birth of a lot of incredible opportunities to make money.
But in my opinion — for what that's worth…
Brad's new venture has the most potential for long-term investing success of anything I've ever seen. And with virtually no discernible downsides.
Especially since it just went public on Monday.
That's right, the company started trading on the market just four days ago.
So take it from me, and do yourself a favor: Get AF's high-definition video coverage of this year's Symposium right now…
(Editor's Note: It's your choice: digital, CD, or FULL high-definition video. You can enjoy all the speakers, debates, ideas and ticker symbols from the Vancouver Investment Symposium in the comfort of your living room with your recordings. But if you want the best price (a full HALF-OFF) you need to click here before Tuesday.)
Study Brad's charts, facts, stats, and summary of this new venture…
And I'll bet you'll be as convinced as I am that this is worth every penny you can put into it. I honestly believe it's the single best investment opportunity you'll ever encounter.
OK, "reporter" hat's back on — and less than an hour to my midnight deadline.
Gotta power through these next few speakers and put a bow on this dispatch…
Chuck Butler — How a Contrarian can Take a Beating in the Short Term
I thought I'd seen it all over the years at the Symposium…
But leave it to Everbank's colorful President, Chuck Butler, to pull a "first" on the penultimate day of this event.
He actually got everybody in the audience to sing!
The song was Lemon Tree, by somebody named Trini Lopez.
I'd never heard the tune before — but plenty of people in the crowd knew it, and you could hear them singing softly along…
Lemon tree, very pretty, and the lemon flower is sweet,
But the fruit of the lemon is impossible to eat.
Why'd Chuck turn the British Columbia room into a sing-along?
To hammer home the point that although there's a lot of "strong dollar" rhetoric floating around now, it's a fruit the smart investor cannot eat.
According to Butler — and he proved this, beyond doubt — with a series of charts and graphs that would sober up a drunken sailor…
Or a Fed Chairman who's spending money like one…
The U.S. dollar has been on a sustained downtrend, with a few brief reversals, for a dozen years or more.
Chuck also reminds us that he predicted this slide way back in 2001.
And for being right, he was vilified.
"I was beaten, flogged, sent to the woodshed, and everything else," says Chuck, "But it was there, in writing, and I was going to keep it there."
Moral: Being right doesn't always make you popular. In fact, it can make you hated.
And right now, Chuck's ready for another round of hate…
Because while everyone is saying the buck's in a "sweet spot," Chuck's saying, "You can't eat a lemon."
"The dollar's fundamentals have not been good in the past, they are not good now, and they will not be good in the future," says Butler. "Not until we deal with our debt."
And what are the odds of that?
Not good, says Chuck. Especially with 10,000 baby boomers retiring every day, and unfunded liabilities soaring.
 To make matters worse, China has been taking bolder and bolder steps to undermine the dollar as the world's official reserve currency…
When that happens, what incentive will China have to keep lending us money that we're repaying with less valuable dollars in the future?
And if not dollars, then what will they demand in repayment of our debt? Oil?
According to Butler, it's not out of the realm of possibility…
What to do?
Look to metals, says Chuck. Gold, silver, platinum, and palladium.
Other than that, what else can we do?
On that cheery note, let's end the day's coverage with something a bit more upbeat…
Doug Casey — You Can Profit From the Coming Collapse of Western Civilization
As usual, I'm running out of time, and running out of space for this dispatch…
But there's no way I could cover an AF Symposium without at least briefly hitting the highlights of Doug Casey's presentation.
And this year, American's favorite anarchist was at his irascible, contrarian best...
 "Right now, with things looking reasonably stable with the economy," Doug jokes, "Nobody really believes the perma-bear story."
But then again, Doug's three real-world criteria for a depression — since there is no official definition of the word "depression" in economic terms…
Sound eerily familiar. They are:
- "A period of time when most people's standard of living drops significantly... the standard of living in the U.S. peaked and started falling in the early 70s."
- "When the business cycle climaxes… and basically, a business cycle is 100% the product of inflation."
- "A period when distortions and misallocations of capital… pumped into the market by government… are liquidated. Stock markets can collapse, bond markets get defaulted on, real estate prices can collapse, all kinds of things can happen."
Hmm. Didn't we all just see that movie? And aren't we now just sitting through the closing credits?
Not according to Doug…
"What I call the Greater Depression started in 2007," says Casey. "We're currently just in the eye of the storm."
And if Doug's right about that, what we're in for as we pass through the trailing edge of this hurricane will make 2008 look like nothing.
But will that be a bad thing, or a good thing?
Doug's take on that is not the least bit surprising, considering the source…
"A depression can be a very good thing," Casey muses, "Because you want those distortions and misallocations of capital to be liquidated. So that future capital can be allocated properly."
Yeah, that's all fine and dandy on paper. But I don't know anybody who wants to live through it.
Yeesh, look at that.
It's already after midnight — and I haven't even touched on Doug's list of five solutions that will solve all of America's problems (one of these: Default on the national debt!)…
Or his four specific predictions for the future of America (one of these: Bankruptcy of the federal government)…
Nor have I even mentioned Jeffrey Tucker's entire presentation.
Or ANY of the lucrative information in any of the afternoon "break-out" sessions.
See what I mean when I say this year's Symposium is the most jam-packed ever?
But then again, the last one of anything is generally the best.
And to make sure you get the best (and most lucrative) experience possible out of this year's Symposium…
You've really gotta get AF's high-definition video coverage of it.
Yes, you can still get the audio-only recordings. And it'll give you a little taste of the event — at least more than these dispatches ever could…
And of course, you'll get the names, ticker symbols, and analysis of all the specific recommendations our speakers make.
But you won't get the best of the best.
The charts. The graphs. The hilarious slideshows. The bikini shots (courtesy of Chris Mayer, playing the racy part usually played by Patrick Cox)…
Once again, your coverage options are as follows:
- Audio-only digital MP3 files — $99
- Audio "combo" of MP3s and hard-copy CDs — $149
- A/V "bundle" of MP3s, CDs, and high-def digital video — just $199
Keep in mind that all of these coverage options include our written summary of the most critical information from the afternoon "break-out" sessions…
And that this pricing is only good until the day after my Roving Reporter coverage ends — that's Tuesday, July 30th.
So click here now, or anywhere else in red, to choose which option you prefer...
And get ready for highlights of the final day ever of the Agora Financial Investment Symposium — coming your way on Monday.
See you then,
Yours truly,
Jim Amrhein
Symposium Roving Reporter
P.S. I can't stress this enough: If you want to get in on Brad Farquhar's incredible new "streaming" agriculture finance company, the time to act is right now. It just went public on Monday, and it's already made dramatic gains…
Click here or anywhere else that's red to get all the details on this play — plus so much more. Every minute you wait is money you lose.
| | | | | |
© 2013 Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. A lthough our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. 
No comments:
Post a Comment
Keep a civil tongue.