Investor Points of Few – Market Climate Meets An Inconvenient Sleuth

“More often than not you’ll find that when you dig a little deeper into the accuracy of doom-and-gloom market fortune-tellers, their predictions rarely jibe with what happens in reality…”

By Alan Steel

It’s been eleven years since Al Gore’s Sharknado-style documentary, An Inconvenient Truth, took the concept of monetising panic to an entirely new level.

Recently, Danish statistician and President of the Copehagen Consensus Center – Dr Bjorn Lomborg – has claimed the UN climate treaty will cost (all of us) $100 trillion…and likely only postpone the expected / projected warming by less than four years, by the year 2100 (Climate Depot).

That investment apparently equates to a reduction of just three tenths of a degree.

Jings! Not much of a return there, eh?

That said, you have to wonder why Big Al went and bought a beachfront mansion after predicting sea levels would rise by 20 feet (seriously).

More often than not you’ll find that when you dig a little deeper into the accuracy of these types of doom-and-gloom fortune-tellers, their predictions rarely jibe with what happens in reality.

And that’s as true for climate change as it is for financial markets.

Here’s a good example: As a former Geography and Maths student at the University of Edinburgh in the late 1960s, I remember the popular scientific consensus was that world was headed towards an ice age and that we should be using soot to cover the Poles to attract the sun’s heat.

So much for the popular scientific opinion of the day, eh?

You can see how so many of these convenient untruths can be rumbled by the fact-checking of “inconvenient sleuths” regarding the climate Armageddon that appears to be “on hold pending further investigation.” Check them out here (Al Gore’s Eight Big Oops Predictions), here (The Sea Levels That Did Not Rise), and here (What We Sea Is What We Have).

So, what about those who’ve been calling for the market apocalypse for the last eight years?

In my recent article, Some Things Never Change, I wrote:

“And of course there’s still a pack of perma-bears who see stock market crashes around every corner. Much quoted guru Jim Rogers (William Bernstein said the reason ‘guru’ is such a popular term is because ‘charlatan’ is so hard to spell), featured in this headline only a week ago: The Bottom Line: Legendary Investor Jim Rogers Expects the Worst Crash in our Lifetime.

“But let’s remind ourselves of his record: In 2011 he said – 100% Chance of Crisis, worse than 2008. In 2012, Jim said – It’s Going To Get Really Bad After The Next Election. In 2013 – You Better Run For The Hills. In 2014 – Sell Everything And Run For Your Lives. In 2015 – We’re Overdue For A Stock Market Crash. In 2016 – $68 Trillion Biblical Crash Dead Ahead.

“And he’s described as “Legendary?!”

Sadly, these types of folks are everywhere – media darlings one and all because they scare the viewer ratings up to new and dizzying heights, and help sell advertising and newsletters; the latter with catchy titles like; Here Comes the Four Horseman of the Stock Market Apocalypse, and Equity Investing is Like Dinner with Trump.

Pessimism sells, folks, and the market for it is only getting bigger everyday.

So you can either (literally) buy into those scary predictions and convenient untruths, and bury your money in things like 1% deposit accounts, the low and sometimes even negative returns of bond funds, or join the crowd in index tracker funds that are designed to buy things only after they’ve already gone up.

Or you can find a sleuth with a good track record who can help you see beyond the fortune-tellers.

It’s up to you.

Because after all, it’s your money we’re talking about here.

Alan Steel, Chairman, Alan Steel Asset Management

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