8 Macro Money-Making Ideas for This Market

By Jim Wiandt

Has anyone noticed that the dollar seems to have turned the corner, oil is under $115 a barrel and the air in general feels like this is a seminal moment? 

Well, maybe it's just me, and despite the wishful, semi-desperate-sounding cheerleading that says the MARKET has turned the corner, I'm actually guessing it's a dead cat bounce on the equities market (give it 6 months or a year to know) and that housing and the financial crisis still need some room to breathe.

A lot of things do seem obvious in the market and then seem to happen. It's just the matter of when that's the difficult part. But over the last 10 years, most of my intuitive thoughts have been borne out in the way the market has run ... it has just happened 3 or 5 years later.

So with the weekend upon us, let's put aside Fidelity, and PIMCO and Rupert, and take a look at The Obvious. When everything was headed straight up and nothing seemed to make sense, The Obvious was tough. But as people panic and markets scramble, trends and opportunities tend to settle into focus. So in my best NON-efficient market-timer persona, here's The Obvious I'm seeing right now.

1. The Dollar. I've been on the wrong side of this one for years, earning dollars and spending euros. During that time, it has been fundamentally obvious to me that the strength and flexibility of the U.S. economy blows away that of Europe. So the euro strength has always felt like an artificial and short-term trend propped up by a confluence of enormous government debt, an aggressive Fed and a huge trade deficit. Those factors are still in place to a degree, but the Fed is easing off the gas. And at the same time, someone noticed the obvious: that the European tank is full of low-grade gasoline, and it runs $8 a gallon. So yeah, I'm saying it now. It's over this cycle for the euro, and we're breaking through 1.50 and on down toward par and beyond. Give it 3-5 years.

2. Financials. It's not like Citibank (C) and all the rest will be going out of business, or will forget how to make money. When the bottom is, I don't know, but we're down a lot already, and you've got to think that there's real value in the sector.

3. Oil and Energy. I was screaming this when oil was about $10 a barrel, but whatever happens near term, there are some basic dynamics in place. The world needs progressively more energy, and the planet is not manufacturing more oil at a very rapid pace. So the price is headed one direction with respect to the rest of the economy ... until the alt energy guys come to the rescue. So the big oil companies with all their infrastructure will always be a decent long-term bet in my mind, and the innovators space will be booming, particularly in Barakica.

4. China. The Olympics are on and China is arriving. You can deny it. You can be nervous about the markets or the politics, but a hard rain is coming. And it's a red one. So get your red rain collector and get on the right side of history, of empire.

5. Emerging Markets & frontiers will continue to grow faster than developed nations. They've just got more space to work with.

6. Medical. With more and more people living older and a big bubble of them GETTING older, this stands out as an obvious one. But I'm just not sure I'm convinced. Because healthcare has been growing at an insane rate for a long time and it's simply not sustainable. Something, I feel, has to give. And the most likely is some kind of corporate revolution that ends in nationalized or pseudo-nationalized healthcare for cost control. So I still like it, but the obvious here doesn't seem QUITE so obvious to me.

7. For the same reasons, U.S. Equities make me a little nervous. Not that they won't bring in returns, but that they'll bring in much lower returns, for the simple reason that the U.S. investing boom is on the backside slope and demographics are moving us into the drawdown stage for the ‘boomers, so don't be expecting 10 or 15% annualized returns, or even 8% with the old blue chippers.

8. Gold. Uh, still love it and they're not making more of it, but at $900 and more and an economy that may be near the bottom of its cycle, I'm taking a little break ... at least until the World Gold Council comes up with some funky new derivative that will give far more people an excuse to buy the shiny stuff.

Hmm - I guess that's all I've got right now. It's late Friday night (as I'm writing this), what can I say?

I really do enjoy it when the markets are moving around like this. It just makes it easier to lock in on things. And the stories that are driving the world stand out more starkly. Oh, and by the way - don't listen to me, I know just as little as all those other guys babbling away on CNBC. Save some money, get diversified, invest at low cost and stick to your plan. I like seeing what's going on, and tilting a bit here and there, but pretty much I go down the middle and am an old-school index investor.

Happy investing!

Comments

[JAY BOSLIN:]

You are kidding! That's it! Thanks for stating the absolutely obvious as if profound. I'm new to Seeking Alpha, but I got the impression we are supposed to be waiting for your word on the market. Forget it, genius. Spare us your advice on sticking to index funds.

2008 Aug 10 10:50 AM

[mrresponsible:]

Just returned from extensive traveling in China: Indescribable and Unsustainable: Growth and Pollution Fish can not live in 62% of the rivers, people are dying from pollution who have lived for centuries along the rivers, heart and stroke rates are skyrocketing, 700 million farmers who manually grow much of the food source - their children are moving to the urban areas in mass, fuel distribution disruptions frequently, 1.3 million people who inhabit 1/2 of the land mass as the U.S., millions of young people viewing the same websites as we do, cities growing from 800,000 to 5 million in 5 years, 1000 new cars/day on the roads, etc, etc, etc.

2008 Aug 10 11:31 AM

[kkin365:]

Mr. responsible: What is the point you are making? Lumping isolated incidents does not mean a trend. How extensive is extensive? A couple of weeks? How extensive have you traveled in US? What observations can you make after your extensive travels in US?

2008 Aug 10 03:17 PM

[Urbane Gori...:]

To further mrresponsible's comment: How does China intend to support and aging population with a 'one child per family' policy. Who is going to work in the factories, till the fields, care for the aged and infirm, etc? Aside from his comments, I see a very large issue arising there in as short as 15 years.

jegan ;-)

2008 Aug 10 03:17 PM

[lanaar2:]

They will have to reform the 1 child policy, and they must cherish the women!

In the next 15 years I can see the economy gradually moving off manufacturing and agriculture, into services. As they invest in technology, it will lead to less labor intensive jobs...

2008 Aug 10 08:03 PM