John Petersen

Deflation Looms

I have to like those Sunday mornings when two of my favorite writers named John (Loundsbury and Mauldin) explore the same issue in depth. Thanks for a very helpful piece.

Are We Headed for a Green World or Business-as-Usual?

"[B]oth 'camps' should be listening ... to each other" is simple yet profound. The biggest problem our world faces is 6 billion people who know how well 500 million of us live, and want to earn their share of the dream." The days when the have-nots lived in ignorance of the fact that there was a better way are gone. Our major challenges will be finding relevant scale solutions to global shortages of water, food, energy and every imaginable commodity. Those who believe that business as usual is sustainable don't stop to think about the amount of pressure (or for that matter force) the six billion can put on strained markets. Many green advocates push for solutions that are inherently wasteful; that waste one resource in the name of conserving another. Over the next two decades, the two sides will have to come together and do everything possible to make a bigger pie and eliminate waste wherever possible.

The Five Economic Horsemen

The Unexpected White Knight

While my optimism may ultimately prove to be misplaced, we have a situation where for the first time in history there are 6 billion people who know how good 500 million of us have it. As the 6 billion demand at least a small piece of the economic pie, we'll have to minimize waste at every opportunity and perhaps make some adjustments to consumption patterns (reduce, reuse, recycle). On the other side of the coin modest demand from 6 billion new consumers may well increase the level of overall economic activity to the point where debt repayment from additional income is possible. Economics is not a zero sum game and while the baby boom generation was a huge economic driver, we will pale in comparison to the 6 billion.

1929 All Over Again?

Wonderful analysis as usual John, but I question whether it might not be substantially different this time around because for the first time in history the six billion "have nots" actually understand that there is more to life than subsistence farming and are working overtime to earn a better life, even if better only means a cell phone for text messages or perhaps a light after the sun goes down. Our generation has always been described as the pig passing through a boa constrictor economy. My sense is that demand pull from 6 billion new consumers and the laws of immense numbers will likely shape the coming years in ways we can't begin to imagine.

Global Markets in Review: Investors Shrug Aside Gloom

I wonder whether a big part of what we're seeing is simple fatigue with the unending barrage of overhyped bad news from the "all fear all the time" media. Panic is one of those emotions that is not sustainable for any significant length of time. Ultimately intelligent people figure out that life goes on, we are not facing Armageddon and the only real choice is to put one foot in front of another and try to solve our problems. Once attention turns to problem solving instead of panic, the psychological tide will turn, if it hasn't done so already. There may still be events that will rattle investor confidence, but I think most of us are tired of worry and more interested in being part of the solution.

Stock Market Valuation Requires a Long-Term View

Logical argument, but after reading Mauldin for 10 years I'll never take a bet that he's going to be wrong without getting some pretty long odds in return.

Reversion to the Mean for Equities

II think Keithcho's observation about the magnitude of the non-NYSE major company markets indicates more downside potential than a simple glance at the NYSE numbers. If we increase NYSE market cap by the major NASDAQ companies that could be NYSE listed but choose not to, market capitalization of major public companies as a percentage of GDP is significantly higher. Since I'm feeling pretty battered and bruised right now, I too want the beating to end. But there are risks as our friends at Agora are wont to point out.

I've written a lot about cleantech as a likely market driver for the next 50 years and believe there is a lot of opportunity in the sector. But I remain cautious about the neurotics who build fairy castles in the sky and the psychotics who have already scheduled the movers. To quote Dylan "the times they are a changing."