Money Show 2009: The Future of Investing

For those of you who believe like Robert De Niro’s character, Louis Cyphre, in the 1987 movie Angle Heart, that “the future isn’t what it used to be”, then the Money Show appearing in Las Vegas now is the place to be. In addition to the permabears, gold bugs, get-rich-quick traders, emerald colored horticulturist, emerging companies from China and natural resources income plays are on display.

If you believe as I do that the paper asset run from the early 1980s, added by 25 years of falling interest rates and inflation, deregulation and easy credit, is kaput, then the obvious question is how one diversifies intelligently investments today for tomorrow. Upon the first lap around the exhibitors’ floor, certain potential investment plays caught my attention.

EverBank’s FDIC insured currency denominated certificates of deposit is a conservative way to hedge against a falling dollar. Currency exchange is your only risk. Another deliberate way to escape the falling dollar is with the MERK (MERKX) Hard Currency Fund. The open-end fund has operated since 2005. It also has a younger sibling, the Asian Currency Fund (MEAFX) that started in 2008. Our current monetary policy of quantitative easing and budget deficits, as far as the eye can see, is a near guarantee for these assets to do well.

Income plays you may want to look at include Calumet Specialty Products Partners, LP (CLMT), and maker of specialty hydrocarbon products. It closed testerday at 11.39 a share and currently pays a $1.80 annual dividend (15.5%). Holly Energy Partners LP (HEP) own and operate (with partners) oil and gas pipelines and facilities in the southwest and Northwest. It's 100% fee based revenue. Closing price yesterday was $26.59. The current dividend is $0.775 per quarter. A Canadian play is PennWest Energy (PWE). It is the owner of the largest conventional oil and natural gas reserves in Canada. Its price yesterday was $12.80. It pays $0.13, per share, monthly.

For an integrated oil play, Royal Dutch Shell PLC (RDS.A) is worth considering. Yesterday’s closing price today was $49.63, yielding 5.75%. It is above its 52 week low of $38.26 and well below the 52 week high of $88.73. It is currently trading for 1.15 times book and the return on assets is 9.3%

If you crave direct investments in China as the way to go, there is an investor newsletter called China Rising to which you may want to subscribe. CCG Investor Relations, a public relations firm retained to introduce Asian companies to global investors, promote this newsletter. In March, China became the number one automobile manufacturer in the world. China has approved a 500 billion dollar stimulus package to maintain its GDP growth rate above 6 per cent. This is an excellent tool to begin your own research on mainline China investment opportunities.

There is much more see here so back I go to the exhibitors’ floor.

Disclosure: No positions

Comments

[chleoku:]

Good Info. China investments have lots of great potential these days, especially during US's down market. Another good indicator is too look at the VC funding growth rate in China:

www.wealthalchemist.co.../

50% increase though the size is still much smaller than US

May 13 09:35 AM

[mlp investor:]

CLMT generated 2.7x the cash they need to pay the 15% yield. The stock has not recovered from selling by forced liquidations by the hedge funds

May 13 09:29 PM