Skip to content

Boring is the new black

  • by

Where do you go to fine respite in uncertain times? Value (and stores of value). Yes utilities, copper-mining and government-bonds are not-sexy investments, but they will rule for the next decade.

Source: Robert Schiller and Kenneth French, Euclidean technologies

In the above graph, inflation is represented by the consumer price index (CPI). Value stock are represented by companies with the bottom 30 percentile of the price to book ratio (P/B) listed on NYSE, AMEX, or Nasdaq.

Similarly, tangible assets like commodities (especially metals such as copper, Uranium, gold and platinum) and real-estate have tended to weather these periods well. Given the tremendous losses in the world supplies of wheat, agricultural commodities are also in play. Expect food shortages and famine in much of the world in 2023 and beyond. Longer term interest rates will not be moving back down any time soon. As retiring baby-boomers exit their investments onto safer harbors expect considerably higher cost of increasingly scarce capital. Hence, add fixed income as another category to get “excited” about.

Climate change anyone? Uranium has always been both the obvious, and only path out of the doomsday of climate change. Political shortsightedness has caused us to lose more than two decades of precious time. This is now slowly changing: watch Uranium and Uranium miners prices.