subject: Seeing Farther, Wall Street & Dan Frishberg [print this page] Seeing Farther, Wall Street & Dan Frishberg
Seeing Farther: a parable
I'd like to tell you a story from my grandfather's day. Like Dan Frishberg I also had a Jewish grandfather when I was growing up. But while Frishberg's grandfather took him on visits to the Wall St. stock exchange and explained the secrets of finance, mine told stories. Which may be why he is a successful stock market commentator and I write a blog.
Now these events took place near the town of Lubin which, I guess was near where my grandfather grew up - just don't ask me to find it on a map. It matters because the Seer of Lubin lived there. Otherwise it was a place, like much of Eastern Europe, where Jews were tolerated but not especially well liked. This one particular Jew lived in a run-down cottage on the land of the local count. The count was an okay guy. He allowed the Jew and his wife to live there by his grace (even though the Jew's family had been there for as long as the count's). The Jewish family kept a few goats and the count's household bought some of the milk and cheese they made.
One day on his way into town the man met the Seer of Lubin - the soothsayer took his hand and turned pale at what he foresaw.
"Gather up what you need and sell what whatever you can. The count is about to accuse you of stealing - he's going to beat you and send you packing."
"Oy vey iz mere!" the poor man said and immediately turned around to go home and prepare for the worst. But when he was returning to the town with his possessions on his back, ready to sell it all, he ran into the Rabbi Eliazer - another prominent Lubiner. When he heard the man's story the rabbi took his hand and smiled gently - "Go home," he said. "Everything is going to be just fine."
Not wanting to disrespect the rabbi, the poor man turned his back on the town again and trudged home, not sure what to expect. Sure enough, the Seer of Lubin's prediction came true.
The count was waiting for him at his door with a stout stick in his hand. As soon as the man walked into his courtyard the count was on him, cursing him and demanding to know where the man had hidden his ill gotten gain. When the man continued to protest his innocence the nobleman became more enraged until he finally ordered the Jew and his wife to leave.
Then the count went home and trumpeted his accomplishment to all who would listen - not the least of whom was his wife. But the countess was not impressed - she was furious.
"How am I supposed to make this house work without my Jews?' she demanded. They could always be counted upon to know where the best bargains were to be found. If she ran out of household funds it was her Jew who could borrow and lend until the taxes were paid.
She demanded that her husband to go find the Jew and his wife, and do whatever it took to get them to come back. Which he did, offering them a newly rebuilt cottage, a pen for their goats and a sizeable purse full of coins to return.
The next time the man was in town he went to see the Rabbi Eliazer to tell him what had happened. "Yes," the rabbi said. "The Seer sees, and I see too. I just see a little farther than he does." We're all like the poor man in the story, looking to financial gurus who stare into their crystal balls of market trends to see where the world is going next. They don't have to have the wisdom and mystical vision of a mythical rabbi - but you do need to listen to someone who's looking a little farther ahead than the pack. That's precisely what I see in Dan Frishberg.
For the past several months he has been talking up the idea of looking beyond America's shores for new investment opportunities. Up through the first half of this year there was no particular reason to jump into this in a hurry - or so said the conventional wisdom. With the start of the third quarter, however, Dan Frishberg began telling listeners to his "Money Man Report" radio show that the tether that kept US stock values and the foreign plays he described pretty much in synch had stretched past the breaking point. The world economy is growing at 6 percent a year, while the United States is stuck around 2 percent.
Some places are doing better yet, like India or Argentina, which is growing faster than even China at about 9-percent this year A new middle class is cropping up from Asia to Eastern Europe and Latin America and it's reaching critical mass. Countries and companies around the world are managed according to principles learned from the U.S. and have become magnets for new development and investment.
"There is absolutely nothing stopping all of us from taking a major role in it except fear and habit," Frishberg says, "Taking advantage of those changes can make you very rich." Another thing that Frishberg recommends is not looking to find the right Brazilian REIT but to look at the long term trends - more middle class people moving into ever larger cities means a rising demand for steel girders and copper wiring, the Money Man says. The rise of the hybrid and electric car is producing a huge opportunity in Peruvian lithium deposits - and the earth-moving equipment they'll need to collect it.
China sent a shock wave through the world when they tightened their stranglehold on the rare earth elements that are key to new electronics parts. The potential for China being the sole supplier is spurring mining operations for new sources across Africa, Asia and the Americas. You don't need to know where the next big strike will be - just that there will be one. Because wherever they are, they will be needing new mine equipment when it comes.
Remember the moral of the story: When somebody really smart is talking, listen.
