| Thursday, July 25th, 2013 | | | | | | | Wry Whiskey aboard the Starship Enterprise | | | By Jim Amrhein
Day two of the last Agora Financial Investment Symposium
Vancouver, British Columbia
Dear Reader,
Long live the Whiskey Bar.
It's a crowd favorite event every year at the Symposium. And it's your Roving Reporter's favorite event as well.
Not just because I've sat on that stage and crossed swords with my fellow free thinkers at a number of past Bars...
But because it's the truest embodiment of what I believe in that I've ever seen up close or participated in firsthand.
The Whiskey Bar is all about the free exchange of ideas, without fear of repercussions -- the Agora ideal, really.
And this year's event was a fitting sendoff, which much hilarity, and edgy opinions from every point on the spectrum.
Now, I couldn't possibly sum up this one-of-a-kind, two-hour event in a brief intro like this...
Of all the events in the whole Agora Financial Investment Symposium, this is the one that really must be experienced in live action (which you now can).
However, as always, I want to relay some of the juicier and funnier moments to whet your appetite.
 This year's panel was comprised of AF staples Doug French, Chris Mayer, Jeff Tucker, and Byron King...
Augmented by oceanographer John Englander, bestselling financial author James Rickards, Barry Ritholtz, and the one and only Doug Casey.
Like the last few years' worth of these panel events, the questions were submitted by people just like you -- Agora Financial readers attending the Symposium.
And here were some of the more raucous answers to those questions.
Ritholtz, on the question of whether Bitcoins spell the end of gold as the ultimate form of money...
"Everybody knows the dollar is going to be worthless... So on your way out, I'll be standing by the door with a bag -- drop off all your worthless paper money, and I promise I will dispose of it properly."
French, same question:
"A lot of us have the fantasy that when the dollar dies, we're all going to grab our krugerrands collectively, stand in the middle of the street and yell to our neighbors 'We were right!' [But] the idea that we're going to go back to trading silver and gold when the dollar collapses, I think is the fantasy."
Rickards, on today's "least ugly" investment destination...
"I think the best investment destination in the world, all things considered, is actually Canada... The people running China know it's going to collapse, and they're getting their money out as fast as they can... Where is Chinese money going? Most is coming to Canada."
Mayer, same question:
"Right now... the U.S. is still the cleanest dirty shirt in the hamper."
Casey, summing up:
"To me, the world's financial markets are a casino... a good investment opportunity is one where you get some return on capital. It's not necessarily about how good the thing is. I mean, Apple is a good company, but who the hell wanted to buy it at $700? I'm willing to buy a horrible thing if it's almost free."
Rickards, on coming "game changers" in the global money scene...
The biggest game-changer in the world right now... is water.
Casey, on the biggest money mistake of his life:
"The most serious mistake I ever made in my life was [when]... Bill Bonner offered me a 10% share of Agora for $10,000. Just in dividends, I would have collected many millions."
Byron, same question:
"Not buying every ounce of gold I could at $300."
Now think, these are just a few of the shocking and enlightening answers this panel gave to the audience-scripted questions...
But the real fun happens when these guys go "off script" -- and riff on each others' answers.
For instance, to show you how nutty the Whiskey Bar can get, let me give you a few quotes and snippets, completely free of context. Ready?
Here goes:
"Ben Bernanke is young enough that he will live to the point where he is one of the most hated men in America."
"When sex workers leave that industry to go sell real estate, that's the time to get out."
"By show of hands -- who is shocked that Detroit went bankrupt?"
"I married way above my station."
"The failure rates on pre-hire urinalyses are 75% or more."
"Absolutely do not go to college or graduate school, it's the kiss of death."
"Edward Snowden is not just a hero -- he's a superhero."
"I would like to volunteer to mentor Doug Casey."
"Love is the most mysterious, deepest thing you can feel... It's magical, it's wonderful, it's one of God's greatest gifts... But if you don't get a f***ing pre-nup, you're an idiot."
And last but not least, I gotta leave you with this priceless quote from Doug French:
"There are probably a few girls working the streets of Vancouver who would trade services for frozen turkeys."
Don't ask.
You have to see it to believe the context of that comment...
And it's worth the price of AF's video coverage of this event all by itself.
Of course, there's tons more to this event. I've only shown you a snapshot of it.
And I'd love to keep on talking about it -- I haven't even gone into the panel's eight specific investment recommendations for right now, for Pete's sake.
But as always, I'm at the mercy of a midnight deadline...
Which I won't have a prayer of making unless I move on to the action that happened at the Symposium before Wednesday night's Whiskey Bar.
So let's get started one that right now, with...
Frank Trotter -- A Tale of Two Theories: Inflate to Nirvana, or a Hangover From the Bridge
Never has it been more apparent to me that the era of pens scribbling on notepads is drawing to a close than when Everbank's Frank Trotter took the stage.
I was missing brilliantly illustrative charts, graphs, and Powerpoint slides left and right as I scrambled to keep up with my ballpoint pen and yellow legal pad...
State-of-the-art, circa 1945.
If only I had access to the raw video footage they were shooting just 15 feet to my left. I wouldn't have to take a single note.
I'd just sit back and let the brilliance wash over me, pausing every now and again to summarize a graphic or two. Writing these dispatches would be a cinch.
Especially for Trotter's presentation...
His was one of the most graphic-intensive ones I've ever seen at the Symposium. If a picture is worth a thousand words, Trotter just showed us the investing equivalent of War and Peace in 40 minutes!
He started off with a number of charts that appeared to show how everything's cool with the U.S. economy and stock market.
"Stocks are up five years running," Trotter said. "What more could you ask for?"
These carts showed "recoveries" in not just stocks -- but housing, GDP, household net worth, personal property, and more.
He followed this by showing how U.S. energy independence is increasing by the day -- and how our energy is still comparatively cheap. There was only one problem...
It was all a big set-up.
Trotter's real point was that these things are an illusion. All is not well with the U.S. economy underneath the smoke and mirrors...
And if you want to get ahead (or even survive), you'd better get a grip on that reality.
Trotter starts making this rhetorical turn with a chart showing bond interest rates. When looking at the last 50 years, it looks like treasuries are at all-time lows...
But looking at a chart of just the last calendar paints a very different picture.
"This little blip -- 100 basis points -- doesn't seem like a lot, does it?" Trotter asks us. "Well, we think that this just changed the world."
What he lays out after that is downright scary...
According to Trotter, this small uptick in bonds sets the stage for multiple market failures over just the next few months -- starting with mortgages.
His chart showing today's frequency of new and refinance mortgage loans would give my buddy Scott, a loan officer, a swift heart attack.
The line on the graph looks like it's falling off a table as interest rates have jumped up in the last few months.
Even scarier -- and I mean damn near grizzly bear horrifying -- were the charts showing how much bigger the gap is growing between the "1%" and the rest of us.
And how much faster.
In fact, if I could pick only one graphic from the dozens in Frank's presentation to show you, it would be the chart he whips out at approximately 6:14 seconds...
The one entitled "Consumer Household Financial Assets."
If you end up scooping up AF's high-definitions videos of this year's Symposium, I urge to you pause on that one and give it a long gaze...
It will curl your toes, friends.
But it's just one of many eye-opening revelations Trotter rolls out in his Tale of Two Theories presentation, including:
- The four unstated goals of QE
- Why America's getting more politically polarized by the day
- The three things that really matter for global growth
- The surprising markets that have out performed the S&P 500 since 1995
- The six currencies Everbank thinks will outperform the buck
Believe me, you don't want to miss any of this stuff.
The graphics in Trotter's presentation alone are worth the price of the video coverage of this year's event, in my opinion.
And there's tons more to tell.
But my deadline clock's ticking -- and I've gotta move on now to another Agora Financial favorite...
Byron King -- Technology Better Work, Because Everything else is Failing
I love Byron's speeches. He always throws the boomerang way out there, man.
Affectionately dubbed "the most interesting man in the world" by our MC, Eric Fry, Byron's bio certainly fits the bill: Geologist, Navy man, fighter pilot, lawyer...
And of course, Editor of Agora Financial's Outstanding Investments.
Now, I'm used to Byron knocking the socks off Vancouver crowds with his one-of-a-kind way of looking at the world -- and the markets.
But I gotta tell you, his presentation this year floored even me.
In movie terms, think Star Trek meets I.O.U.S.A.
No, seriously. In this presentation, Byron literally takes us to the engine room of the starship Enterprise...
At least, he took us to the place where they filmed the engine room scenes for the latest incarnation of the movie franchise -- this spring's Star Trek: Into Darkness.
That place: The U.S. National Ignition Facility at the Lawrence Livermore Laboratory in California.
That's right, a high-tech, secure installation of the federal government. And all to answer the basic question...
 "Can we out-produce the failures?" asks Byron. "Or will our failures overwhelm productivity going forward."
Now, in case you don't already know this about Byron, he never just answers these questions with a straight up "yes" or "no."
Where's the fun in that?
Instead, he takes you for the ride you paid for. And his 2013 Symposium speech was the wildest ride I've ever seen him take us on.
It started off conventionally enough, with a discussion of things like the six areas of the market where new technologies can have the greatest positive impact...
And the seven factors proving how our current, government manipulated economic system is failing...
But then he veered off into space -- literally -- with a mind-blowing exploration of an incredible new energy innovation the U.S. government's working on right now.
What is it, and how does it work? I couldn't begin to tell you.
Why?
Because I hardly took any notes about it at all.
I was so dumbfounded and enraptured by King's description of this sci-fi worthy contraption -- and by his incredible pictures and cut-away graphs of it, no doubt sensitive material, all of it...
That I basically forgot to do my job.
All I've got in that section of my notes are a few phrases -- like "target sphere" and "deuterium/tritium" and "hohlraum."
And when I went back and listened to my audio tapes to write this section of today's dispatch, I couldn't make much sense of it...
That's because most of Byron's presentation was interactive with the graphics and pictures on screen (See it for yourself, right here).
But I can tell you the gist of the whole thing was this: "Internal confinement fusion."
Basically, that means energy on a par with nuclear power -- but without those hazardous, unsightly reactors.
Needless to say, this technology could literally change the world.
Which was kind of Byron's point -- that we Americans, even the government, can still do great things. And that we should.
Now on that patriotic note, let me more or less dash any hope you have for the future of America -- at least in the short term...
James Rickards -- Where Are We Now? Inflation, Deflation and Debt in the International Monetary System
The instant I saw the title of James Rickards' presentation in the Symposium schedule, I knew two things...
One, that it was going to be an eye-opening education.
And two, that it might make me want to jump from the window of my room on the 12th floor of the Fairmont Hotel.
Rickards, as I'm sure you already know, is the author of 2012's bestselling Currency Wars: The Making of the Next Global Crisis.
He's also the Senior Management Director at Tangent Capital Partners -- and a man with a resume` that few in the money world can even come close to matching.
Don't believe me?
 Fine. Does your "retirement guy" moonlight as a market advisor to the Director of National Intelligence and the Office of the Secretary of Defense?
When you see Rickards' presentation, you instantly understand why he has become the formidable force on the financial scene that he is.
The man is brilliant. So brilliant, in fact...
That I'd have been lost without the battery of visual aids he brought to help guide Symposium attendees through the complex economic points in his presentation.
Now, I'll level with you...
I knew it was going to be a challenge for me to process much (perhaps even most) of this presentation when Rickards cracked off this quote from F. Scott Fitzgerald:
"The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function."
My fears were confirmed when he posted a slide on screen that showed the "Quantity Theory of Money."
On the slide, I saw the following formula in italicized type...
M • V = P • Q
"Oh boy," I thought, "Here's the part where I end up feeling retarded. Again."
But the way Rickards explained this, it was actually pretty easy to get a grip on it. In simplified terms, "M" was the money supply, "V" was the velocity of that money in circulation, "P" was inflation (or deflation), and "Q" was real GDP.
Now, I'm still a little hazy on exactly how this formula adds up -- but from what I could gather, it shows that...
"We don't have an inflation problem or a deflation problem in the U.S.," Rickards says, "We have both at the same time."
I never knew that was even possible.
But as I found out, it's not only possible -- it's the only logical explanation for exactly where America's at right now, economically speaking.
I also found out that monetary velocity is a key factor.
"If you don't have velocity, you don't have an economy," Rickards explains.
He also lays out:
- The two ways to change monetary velocity
- Why deflation is The Fed's worst nightmare
- The seven tools The Fed uses to achieve inflation
- The four factors that determine whether or not markets are "complex systems" in the scientific sense
And this is just a small portion of what Rickards goes into in his comprehensive, hour-long presentation. It's like a crash course in economics!
Now don't worry if you're a little shaky on the numbers and equations and all. Rickards lays all this out in way that's simple to understand...
Trust me: If I can get a handle on it -- you can, too.
And I know you can wrap your head around this...
"The collapse of confidence in the dollar is going to happen a lot faster than you think," says Rickards. "[And] the international monetary system will collapse sometime in the next 3-5 years..."
Now, if this doesn't scare you right out onto the ledge with me, then you must not have any money in play in the U.S. stock market.
What happens after this collapse, you're asking?
I wish I had time to go into all that.
But even if I did, I couldn't explain it all in the clear, concise way that Rickards can.
So seriously, if you want to know what's coming...
The very best thing you could do is spring for AF's coverage of this final Symposium event -- in audio-only or new, improved high-definition video.
Yikes, I gotta wrap this up fast.
It's 11:54 PM right now -- and if I blow the deadline for this dispatch as bad as I blew last night's, I'm going to be in major trouble.
So without further ado, let's move on to my all-time favorite Symposium speaker...
Barry Ritholtz -- Romancing Alpha, Forsaking Beta
I don't have anywhere near enough time to give Barry the ink he deserves here, but I'm going to do my best to hit the high spots for you...
Why not just skip him and go to bed, you're wondering?
Two reasons: One, because in my opinion, Ritholtz is the very best speaker this show has ever seen.
He's the thinking man's analyst -- and everything he does or recommends is based on the logical evaluation of facts...
Not emotions or ego or peer pressure or anything else. Just the facts.
 And two, because this year's presentation is actually a continuation of last year's speech. It wouldn't be fair to all your repeat readers not to cover it...
Ritholtz began with a brief recap of last year's info -- including excerpts from his hilarious slideshow featuring Homer Simpson as a market trader.
After that, he powered through a review of "Behavioral Economics and Neuroscience," "herding," the "optimism bias," and the "four F's" our brains are hardwired for...
Barry also reminded us of some key facts from last year:
1) Many seasoned traders tend to gather too much information -- which hurts their performance by hindering their ability to capitalize on trends the less-informed masses drive forward.
2) "Expert" forecasters (in anything, not just the markets) perform no better, on the balance, than average market traders.
3) Sounding certain and making specific predictions persuades more people that you're right -- but actually makes you more likely to be wrong
Now, after this quick recap, Barry started in with the second half of his presentation...
Which began with a look at what I'm pretty certain is called "confirmation bias" in psychology circles.
It's the tendency for people to seek out information that confirms what they already believe to be true...
It's a problem that's plaguing more and more traders these days -- because of the Internet.
"The problem the Internet has created, is this universe of vulcanized information," says Barry, "and we have a tendency to go out and find that which agrees with us, and ignore that which challenges us."
"In the world of investing, this has really devastating consequences," Ritholtz adds.
Now, just like last year, Barry's talk is chock-full of statistics and charts and graphs...
More than I could ever summarize here -- and about more facets of investing than I've got ink (or time) to cover.
Trust me, it's all fascinating, and worth its weight in gold.
But the one thing from this "part two" of Barry's presentation that I definitely wanted to share with you...
Is the part about the outrageous stuff that hedge funds get away with.
According to Ritholtz, hedge funds are no better at making people money than mutual funds or the major indices...
In fact, they're a lot worse.
"For 2012, the average hedge fund gave us 3.5% returns -- before fees," says Barry, "The S&P 500 gave us 15%."
Even over the last five years, the numbers are no better, the S&P gained 8.5, while the average hedge fund lost over 13%.
But this fact didn't stop hedge funds managers from making nearly $400 billion in fees between 1998 and 2010...
While their investors only made $70 million.
"Hedge fund managers are really good at making money," Says Ritholtz, "for themselves, not for their investors."
It's mind-boggling how much these hedge-fund guys make -- up to $2.35 million...
Per hour!
In the rest of his presentation, Ritholtz explains why this is.
I'd do it for you right now, but it's 1:05AM, and damn if I haven't blown my deadline again.
And I didn't even get to some of the other awesome presentations.
Like Neil George, Editor of AF's Lifetime Income Report, who talked about how to make more yield with less loss in your income investments...
And Steve Yuzpe, who laid out a stunning case for why the time to invest in agriculture is right now.
But it can't be helped. There are only so many hours in a day.
And my day starts again in just 6 hours. So let me wrap up and get to bed...
As you can see from the length and density of these Roving Reporter dispatches, this year's Symposium is the most jam-packed and informative one ever.
So far, I've written over two thousand more words of color commentary than at this same point in any other year I've covered this event...
And it's only Wednesday!
I'm still not getting to everybody, either -- and I'm blowing deadlines every night.
My point is this: More so than in any other year of the Symposium, it's important that you get one of AF's coverage bundles...
It's really the only way to get anywhere near all the benefits of this incredible event.
Once again, those options are:
- $99 for MP3 digital audio-only files
- $149 for both digital MP3s and hard-copy CDs
- But just $199 gets you the CDs, MP3s -- and high-definition video coverage
Now, any of these options will be a vast improvement over the bare-bones, incomplete coverage I'm able to give you in these dispatches...
But I'm telling you, this conference has gotten more graphic-intensive by the year.
If you're not seeing it, you're not getting anywhere near the full benefit.
So why wait?
Click anywhere in red to choose your coverage option right now...
I'll see you again tomorrow, bright and early.
If I can get wake up from another night of four hours' sleep.
Yours truly,
Jim Amrhein
Symposium Roving Reporter
P.S. Remember, the day after my coverage of this event ends -- that's next Tuesday, 7/30 -- prices for ALL the coverage options and bundles will go up by 50%. Your best bet to lock in your low "show price" is to order now, anywhere you see red.
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