Investing for the PeakPosted: September 14, 2009
What “peak”? Well, peak everything, actually.
I’ve been researching where to invest cash for two scenarios, the first being the transitional years I believe we’ve just entered which are marked by a lousy economy and strange up/down market fluctuations related to energy and food stuffs. The second scenario I’ve been researching is where to invest cash in the economy that will emerge from the current shakeup, after the transitional years.
Frankly, I have no idea if this economy will fully emerge in my lifetime, but when I think about investments, I’m automatically thinking very long term…for our kids’ benefit.
We’re currently sitting on all cash and short-term US Treasury bills, split among several different financial institutions. But with hyperinflation looming and the international loss of confidence in the US dollar, our paper assets could dwindle very quickly. My friends in the financial world believe a second major correction on par or worse than the last financial meltdown is coming.
So where do you invest in a post peak world? Well, the most attractive option is to turn those paper assets in real assets, specifically in the form of local business ownership and local farmable real estate.
It was with that thought/question in mind that I attended a recent Post Peak Living seminar titled “Sustainable Post-Peak Livelihoods“. It was a two hour session taught by Sarah and Paul Edwards, with ample time allowed for discussion. I found the content high quality and access to the instructors and Andre (session host and founder of PPL) easy and straightforward. Recommended.
They confirmed two things I had been discussing with my wife, the first was the wisdom in investing in the local businesses in our small town that I felt were serving me well during this series of “opt out” experiments we’ve been doing. Specifically, the two bike shops in town, the local hardware franchise, and the two gardening supply shops. In the transitional years we are just beginning, these would become the core businesses of our town.
The second was a long-standing thought which is any time I’m investing my money, I also want to be investing my time and talent. The folks at Social Venture Partners cemented that idea in my brain more than a decade ago.
But the Edwards opened my eyes to an additional investment opportunity: tradespeople. Whether they are existing woodworkers, plumbers, or electricians, they skills in a post peak world will be at a premium since their ability to travel via car while be severely hampered. We discussed financially investing in both established tradespersons as well as younger folks just coming out of apprenticeship programs.
Switching gears, of the post peak investing books I’ve been reading, I have one only recommendation so far: Profit from the Peak, particularly the epilogue. The book addresses more classical investment vehicles, namely public companies. Several of their recommendations are well thought out and worth mentioning:
- General Electric (NYSE: GE): largest producer of domestic wind turbines and innovative new hybrid locomotives
- Zoltek (NASDAQ: ZOLT): US based maker of carbon fiber, which goes into modern wind turbines (and really cool bicycles)
- Toyota: clearly the leader in hybrid vehicles for consumers, particularly with their upcoming plug-in hybrid (PHEV). Although Peak Oil will likely send all vehicles to the junkyard early, Toyota seems best positioned as a good investment during these transitional years.
- Railroads; Gates, Buffet, and Soros are all buying into Canadian National Railway, Burlington Northern, Union Pacific, Norfolk Southern, and CSX.