Most of these can be bought through the capital markets even if there aren't ETFs for all of them.
For farmland there are dozens of small, foreign, illiquid stocks that I've written about before. At times these do very well and at other times they trade like they are going out of business quickly. Two of the easiest to research and trade are Cresud (CRESY) and Adecoagro (AGRO). I think that some names in this group will be huge winners if the world goes down some version of a Malthusian path (I think there is a high probability of this).
As for buying an entire island, believe it or not you can get pretty close. Dole Foods (DOLE) apparently owns just about all of the island of Lanai in Hawaii. a quick glance at the company and there aren't too many reasons to buy the stock. It has badly lagged the Staples Sector SPDR (XLP) and there is no dividend. Perhaps there is a turnaround story in there somewhere but if you know any ways to buy an island without actually buying an island feel free to leave a comment.
The first name in Australia that I think most people would think of is mall operator Westfield Retail Group (WFGPY). It appears to yield 4.5%. A more industrial name would be Goodman Group (GMGSF) which yields about 3.5%. Goodman has been the more volatile of the two but neither has done much in a while so again, maybe these are turn around stories.
A couple of names to get started with from Canada could be Boardwalk REIT (BOWFF) which is a residential REIT and a more diversified name would be Canadian REIT (CRXIF).
Foreign stocks are obviously well covered in the ETP space and there are gold ETFs that hold the metal in other countries but I think Farber means buy some precious metals and put them in a vault in Switzerland (or the like) like Jason Bourne had along with a bunch of passports, foreign currencies and a gun.
We may not have to wait too much longer for a diamond ETF. As was widely covered, IndexIQ has a physically backed diamond ETF in the works. This really is more of a curiosity for me than anything else. I find it fascinating when it actually lists (assuming it does) the entire AUM will fit into an envelope.
Stamps and art are a non-starter for me. The statistics for these things are always impressive but I am always skeptical. There is no reason for an art lover or stamps lover to buy whatever they want if they can afford it but the expectation of it going up like an investment has a high probability of disappointing.
Finally for defense stocks there are plenty of individual names to choose from along with ETFs like the iShares Aerospace and Defense ETF (ITA), the SPDR Aerospace and Defense ETF (XAR) and the PowerShares Aerospace and Defense ETF (PPA).
The point is not to assemble this portfolio but to think about what is on the mind of someone like Faber and how to access some of the themes he thinks are important right now. I doubt any of the above will make their way in to our portfolio unless they are already there (gold and a defense stock) but you might find a Canadian real estate company (just an example) that becomes a ten-bagger. Plus I think these sorts of posts are fun.
15 comments:
I enjoy the likes of Faber, Jimmy Rogers, etc. as they add spice to the investment meal. Faber's Bond nemesis-type voice makes it even better!
If Faber is correct, I think we'll need more than a farm and a sack of gold banked in a vault deep in Switzerland to survive.
I'm likely to "invest" in Snicker bars, Beam Rye whiskey, boxes of Partagas Cuban No 1 cigars and as many good non-fiction books as I can find to enjoy my end of days with a smile.
T
Marc Faber? a buffoon for sure.
Farmland? Are you kidding? Check the meteoric rise in farmland prices in the last 10 years and tell me if now is the time to buy. Diamonds? Ever try to sell one? Biggest scam on earth. Gold? Really, after another meteoric rise, now is the time? Then of course go thousands of miles away to countries most people would never understand and attempt to make a sensible investment. Surely, there are great places with 100 miles of where most of us live to invest wisely. Marc Faber?? Really??
Good thread on farmland as an investment on Bogleheads.
Summary...over the last 60 years S&P 500 has been a better investment.
Investing in farmland now introduces recency bias. Best time to invest in farmland will be during next farm crisis, IMO. Investing now IMO is the worst possible time.
Then again, I don't like buying stocks above the 200 DMA either ;-)
The imporatant point I took from your article is the thought process. It's not about buy and holding index funds, and it's not about following the portfolio of any market guru.
Portfolio management is a thoughful process of buying a variety of quality assets with positive prospects at a good price. That is hard work...but worth it!
If land, island, and that type of inv.class is favorable than I agree that you must buy guns, ammunition ect. since a war type era is uppon us. If some problems are not resolved than I would agree that goverments are in trouble and will change to dictatorship types. Look at Italy, democracy got wiped out by the president asking the elected goverment to spet down and be replaced with a non voted non democratic goverment. When times get desperate that is what happens like pre WWII. Mussolini goverment was not voted in. Mussolini was asked to take over the goverment because in the late 20's there were problems economically. Luckely Monti is not as ambitious and youg as Mussolini in the 20's. So if land becomes a preffered asset class the markes might be anticipating a social happening.
Best,
Jeff from Milan, Italy
6:07,
Lighten up.
Great post, Roger. I like the premise that looking at alternatives to stocks or funds is a poosible alternative for those fortunate enough to have, ahem, enough to invest. If you look closely enough, rather than buying the latest iScreen you can, instead, buy a part of a company or, if you do enough research, some collectibles that will likely hold their value in time.
Possibly these could give you a higher return than just holding stocks (unlikely over 10 years, in my view) but you'll always have use of a pretty platter or nice piece of art until the time comes to sell.
Roger,
your comment was directed at 6.43 and not at 6.07(-- T --). I used to get confused. Roger, when will earning season start?
Jeff from Milan, Italy
oops, thanks Jeff.
Alcoa (AA) kicks it off on Tuesday after the close
Man a lot of people get around to real estate these days, don't they?
The farmland thing is REALLY interesting to me. Commodity prices jacked way up, and that's driving the prices for farmland. My brother and a cousin or 2 are farmers and have commented that they run numbers on some of the purchases from the past year, and just don't know how the farmer in question could make it work.
That said, given population trends, aren't we going to be heading for a price boom in foods/commodities? That's a point Jeremy Grantham has been making for some time now.
OT: I sometimes use an iPad to read you and the website keeps throwing me to "touch.randomroger.com". This prevents me from reading the comments which add clarity to the article. Could you please forward this comment to whomever is doing this dastardly deed.
Thanks
thank you for the feedback, I have passed it on.
Regarding stamps and art, one option would be to accumulate the "forever" stamps at the USPS. These retain the value and every time the postal carrier raises their single envelope rate, your forever stamps appreciate to the new rate.
Just a thought...
Thank you, 12:29. I'm working on the same issue right now. Try swiping back the page and touching "desktop article.". It seems like a temporary workaround.
As a little retail investor, I could foresee the credit crunch coming and went to cash. I think people need to take these 'inevitable' ideas as what they are: somehow all this has to 'resolve' and he is suggesting the forms of resolution and some self protection. He is good at long term forecasting and it would be foolish to disregard his opinion.
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