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  • Brazil: Reactions to a Proposed Energy Law

    With the current financial crisis, we have to be even more astute in locating worthy investment opportunities. I've written lately about choices we're facing as a country – but we have choices as individuals as well: choices that demand solid insight to make well-informed decisions and recognize opportunities at a time when they're not as plentiful as they used to be. It's not enough to know what's happening on Capitol Hill or Wall Street, we must expand our investigations to a global perspective.

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  • Iraq Endgame

    As many of have heard, I had the pleasure of partaking in a weekend of fishing and intellectual jousting with some of today's most brilliant minds. We spoke of war, politics, and of course, the economy. Their interconnection seems somehow much clearer sitting on a Maine lake fishing for bass. This week I offer you an article that's key to understanding the U.S. role in Iraq. Futurologist and fellow aspiring fisherman George Friedman at STRATFOR lays out piece by piece U.S. options in the region. If your interests have anything to do with global energy markets -- and whose don't? -- it's enormously important that you grasp the relationships between various sectors in and around Iraq, and the possibilities moving forward.

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  • The Recession in Central Europe, Part 2: Country by Country

    This week I'd like to address the topic of currency. Flip through any business journal and speculation runs deep, though the ups and downs are far from predictable. A year ago everyone who thought they had half a brain and a pile of money comparable to Uncle Scrooge was threatening to transform all of their wealth into the seemingly unstoppable Yuan. Travel agents were pushing dirt-cheap excursions taking advantage of the near-worthless Icelandic krona to suburbanites with inquiries about sunny beaches and palm trees. And this year, if you're looking for a destination that won't hurt your pocket book, one might suggest Central Europe for that romantic second honeymoon.

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  • Russia, Ahmadinejad and Iran Reconsidered

    I've mentioned a couple of schools of thought before: those who look at the big picture and those who pore over the details. Often, the major product is the result of its minor pieces. If you use good meat, good buns, and good vegetables- you're going to turn out a pretty good hamburger. The same goes for cars, businesses and portfolios.

    One industry in which this methodology really doesn't seem to work is information. Mainstream sources of information almost always fail to connect the world's events. They do a great job telling you that former Iranian president Rafsanjani addressed his supporters, that anti-Ahmadinejad protestors outside chanted 'Death to Russia', and that Israel sent a submarine through the Suez Canal. But they don't show how the incidents fit together in the geopolitical landscape, nor what they mean for the relationships between global powers. They give you the meat, the buns and the vegetables, but there's no hamburger.

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  • The U.S.-Russian Summit Turns Routine

    This week saw a 2-day summit between the United States and Russia that looks to be the first in a trend of subtle push and pull that will shape economic agendas for both states. Just as at the height of the Cold War, these two superpowers are jockeying for global attention and prospective untapped markets. But while the communication between the two is at the same volume and frequency as it was back in the days of Kennedy and Khrushchev, the tone has taken on a different level - as Obama flexes his newly appointed muscle and plants a possible seed of discontent between Medvedev and Putin concerning the future of the former USSR.

    Hands-down the most important thing in Russia is energy. It's not the headline on CNN these days, but come less than 6 months from now the cold European winters will make natural gas supply lines and shipping an unavoidable talking point. Today's U.S./Russia relationship lays the groundwork for the future of global energy markets....
  • Iranian Elections, Israel and the United States

    In the midst of an economic crisis, we are inundated with data - information that often, a few years down the line, turns out to be wrong. Forecasts are made based on a single month's set of data or previous trends, and the public often doesn't know how to read the fine print about margins of error.

    The problem is faulty methodology. Most media and even government intelligence agencies assume the information they get from leadership figures is 100% correct, no questions asked - leading to defective analyses. Instead, underlying assumptions should be constantly vetted in the face of new facts. I'd encourage you to consider the intelligence produced by my friend George Friedman at STRATFOR - a trusted source in forecasting future geopolitical trends....
  • The Geography of Recession

    One of the first things you learn about analyzing a company is how to dissect a balance sheet. What assets and liabilities can be deployed by a company to create equity over time? I've enclosed a fascinating variant on this process. Take a look at how STRATFOR has analyzed the "geographic balance sheets" of the US, Russia, China, and Europe to understand why different countries' economies have suffered to varying degrees from the current economic crisis.

    As investors, it's precisely this type of outside-the-box thinking that can provide us profitable opportunities, and it's precisely this type of outside-the-box thinking that makes STRATFOR such an important part of my investment decision making. The key to investment profits is thinking differently and thinking earlier than the next guy. STRATFOR's work exemplifies both these traits....
  • An Israeli Prime Minister Comes to Washington Again

    Occasionally I need a fast answer. So I'll run a Google search, and 2.54 MILLION responses later I've learned how to handle a Thanksgiving turkey-roasting crisis but nothing useful about Turkey's financial crisis.

    There's certainly no shortage of data these days. But what's in all-too-short supply is understanding. As investors, what creates opportunities isn't access to data but to ways of thinking about the world. I created Outside the Box precisely for this reason, to share with you some of the best thinkers in the world and some of the best ways to think about investments....
  • The Geopolitics of Pandemics

    If you ever look at the footnotes, you know that 'Past performance is no guarantee of future results.' That said, by the time you've gotten a bit of gray hair, you realize that there are few teachers as good as history. 'But this time it's different!' is the cry of people that are usually just about to lose a bunch of money.

    Read the analysis below from my good friend George Friedman at STRATFOR on the latest new thing, the swine flu outbreak....
  • On Energy Production and US Intelligence Failures

    I send you Outside the Box each week not to make you comfortable but to make you think. Usually it is on some financial topic, but life is more than investments. Economics is not an isolated discipline (more like an art form I think) so we have to have a real understanding of the world around us. This week I offer two essays which made me both think and reflect. We live in a world which wants easy solutions to complex problems, and wish as we may, will not get easy solutions which will work.

    The first essay is by Pewter Huber on the reality of energy production. We all want to be able to "go green." How realistic is that? The second is by my friend George Friedman on torture and US intelligence failures.

    Peter Huber is a Manhattan Institute senior fellow and the coauthor, most recently, of The Bottomless Well. His article develops arguments that he made in an Intelligence Squared U.S. debate in January. George is well known to OTB readers. He is president of Stratfor and was with the CIA (as was his wife Meredith) before they founded Stratfor, what I think of as the premier private intelligence agency in the world.

    I suggest you put on your thinking caps and take some time to read both of these very important essays, and enjoy your week. I am off to Orlando and the CFA conference....
  • Second Quarter Forecast 2009: Global Trends

    I've been in this business a long time. Some days it feels like a very long time. But never in all the years that I've been in the financial markets have I felt like business per se has less impact on my investment decisions. Let me explain.

    GM shares have gone from being a claim on earnings from car sales to being a call option on whether the US government will extend another lifeline. Banks' capital structures have gone from being the province of Boards of Directors and CFOs to the "expertise" of Congressional committees and appointed regulators. Used to be when I thought about Financial Centers New York and London came to mind. Instead now I have to think about Washington and Brussels.

    My friend George Friedman and his team at STRATFOR are where I turn when I need help thinking about these new realities. George's team provides me context and understanding of the environment in which financial developments are going to take place. I may tweak him about his ties, but if you saw George speak at my conference in La Jolla, you know that he's an absolutely compelling speaker. And it's small wonder that his latest book spent those weeks on the New York Times bestseller list too.

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  • Obama's Strategy and the Summits

    A long-time religious land bridge between the Islamic and Western worlds, Turkey now finds itself an economic gatekeeper, a US-backed contender for the EU and the only key that could unlock Europe from dependence on Russian resources. The value of your dollar is intrinsically linked to last week’s summits—the most important multinational summits in history.

    I’d like to share with you an article by my friend George Friedman at STRATFOR. It delves into the Summits (G20, NATO, bilaterals) and explores the connections between finance and geopolitics. In this case, it boils down to two string-holding puppeteers: Germany and Russia. Germany, the largest exporter in the world, is happy to up its production while the US spreads its dollar paper-thin by contributing to an IMF fund that will bail out countries who will in turn spend their money in Germany’s already tremendous export sector. Russia, the largest supplier of natural gas to Europe, too stands to benefit from US contributions to the IMF pot, as their slice of the pie gets bigger with the pan—as long as Turkey keeps her pipes closed....
  • The Obama Administration and the Former Soviet Union

    Who's afraid of the Russian bear? As Russia makes a grab for power and influence, the rest of the world watches to see how the United States and her still-new president will react. As an investor, it's important that you're aware of global politics, as the ramifications reach beyond diplomatic relations and straight into the markets.

    I've included a piece from my friend George Friedman's company, STRATFOR, on The Obama Administration and the Former Soviet Union. It's the seventh in a series that explores how key countries have interacted with the United States in the past, and how their relationships with Washington will likely be defined during the administration of U.S. President Barack Obama. It's a must-read for informed investors.

    George has very kindly arranged for a special offer on a STRATFOR Membership just for my readers. I strongly encourage you to take advantage of this offer. Now more than ever, you need a wide lens on the world, as politics shapes the economy. There's no one better than George and his team at Stratfor at telling you what you need to know and why. I know you'll find them as valuable as I do....
  • China: Exports Drop

    When I read the headline, 'China: Exports Drop,' plastic toys, cheap sneakers and milk scandals come to mind. But the impact of China's financial health is more far-reaching than simply affecting the Wal-Mart consumer; China matters on a global investing stage. So that's why I don't just read headlines; I read STRATFOR. My friend George Friedman's team of analysts will take the numbers and explain to me what they mean and how they impact the country, without bias or partisanship. They don't make value judgments, they outline the full financial picture so I can make my own. Understanding China is critical to anyone with investments. In the following piece, STRATFOR graphically presents the decline in exports in a historical context, and outlines other critical measurements in the Chinese economy -- giving me the frame of reference I need. I highly recommend that you start reading STRATFOR for this kind of focused analysis....
  • Obama's Energy Plan: Trying to Kill 3 Birds With 1 Stone

    As a boy with a slingshot, killing two birds with one stone meant I was either the best shot in the land or the luckiest -- and rewarded by neighborhood fame and the good fortune of the affection of the girl next door. As I read a piece sent to me by George Friedman, founder of STRATFOR, entitled 'Obama's Energy Plan: Trying to Kill 3 Birds With 1 Stone,' it dawned on me that reading STRATFOR is the same maximization of my opportunities: not only am I getting information about three important aspects of global affairs -- economics, politics, and military movements -- but I’m getting information I can use to invest, to make business decisions, and to share at cocktail parties. I’m getting neighborhood fame and that girl’s affection all over again. At a time when your investments are earning less and less, getting more and more for your money is more important than ever. STRATFOR continues to give you more intelligence, analysis, and forecasts on more countries, regions, and continents but for the same low price. In the piece I’ve included below, STRATFOR’s expert analysts lay out how Obama plans to address three energy issues with one ten-year plan. It’s more in-depth than anything else out there, offering a clear-cut explanation of complicated energy policies and projects spanning the next decade....