I recently was afforded the opportunity by Seeking Alpha to attend the 11thannual Agora Financial Symposium here in Vancouver, organized by the authors and analysts who provide excellant contrarion investment ideas and market commentary at The Daily Reckoning. I’d like to share some observations and feedback from the event, and my reaction to the wide array of speakers that made for a utopian investor experience. One of the best parts is being surrounded with like-minded individuals, all eager to learn, while looking to expand their portfolios in new and often creative ways. This conference had it all from an early morning workshop on resource stocks that few missed with Rick Rule, to a inside look at multiple emerging markets. This type of investment style encourages investors to get out of their comfort zones and put their money to work outside the traditional “safe” markets, because these are exactly the same markets that have become risky. In fact, if I had to sum up the reoccurring themes at the conference, it would be that the markets are in for significant downside, gold is going much higher, and one of the best ways to diversify is to invest in the E-7 countries as to avoid the continuing assault on the entrepreneur by G7’s Governments.
The Agora conference was new to me, so when I discovered this years’ theme I had to be there. The socialization of America is a subject that has come up often at my trading blog, Zentrader, particularly how the Government has handled this financial crisis irresponsibly, by mortgaging the future of our country. Former head of the U.S. Govt Accountability Office, David Walker, knew best when he said, “Government is too big, promised too much, and delivered too little for far too long.” One major symptom of this he adds is “Politics are dominated by the fringes and career politicians.” I couldn’t agree more. Everybody knows that power and wealth corrupts, so it’s no wonder that our Government has adopted this reverse Robin Hood methodology of taking from the rich (taxation) and giving to the richer (bailout recipients). Frank Holmes who was brilliant, and I believe wants to be a motivational speaker because he had us jump up/down and dance around so we were at maximum listening capacity, made the following assumption about Government policy makers since they are the ones who dictate leverage policies in the financial markets, “Human DNA will always abuse leverage.” So if those in the Government will always abuse leverage, and they are the ones creating policy, it’s quite obvious we need a new if/then statement and a new checks/balance system in place.
One of the biggest surprises for me was how relatable, witty, and market savvy Barry Ritholtz, author of Big Picture blog is. He started off his presentation with these wise words, “Everyone wants to be a contrarian, but few can” demonstrating how difficult it is to truly separate oneself from the crowd. He has a way of making you feel like you’ve known him for a long time and you can tell he has a knack for taking macroeconomic news and turning it into tradable information. One question that I wanted to answer coming into this conference was “How is the best way to utilize this information from Agora?” As a trader with a much shorter-term time frame than most, I wondered if I’d be able to find trade ideas there. The slideshow that Barry had prepared for us really told a story, one that takes us where we’ve been throughout history and offers concrete, usable guidelines about where we are possibly going by way of a composite of 19 secular bear markets. He believes us to be at the start of another significant decline that should take the markets down another 15-20%, lasting 13 months, but the good news is that the 2009 lows will hold. We will then enter a large, range bound market for 5-6 years, potentially frustrating the most amount of investors possible. Finally a new bull market will start in 2017. This particular time frame was echoed by many on the panel, so a defensive stance to protect what wealth you have now was continually stressed.
Day two of the conference introduced me to Doug Casey, who is perhaps the most bearish person at Agora. I found myself shaking my head in disbelief at some of his suggestions to fix the world considering he believes “much of the world we live in is terminally corrupt.” While I had a hard time determining if he was actually serious on some of his points, I don’t disagree with him. But I have to wonder if it would be better to focus on the positive aspects of the world instead of what is wrong with it. He did get the biggest cheers when he suggested that the US should abolish the Fed, abolish the income tax, and default on the national debt because this is eventually going to happen anyhow. Of course if his prophetic visions of doom and gloom (did he study under Faber?) do come to fruition, he feels comfortable knowing he can get out of the country and return safely to his vacation home in Argentina. I for one really like the idea of having a second home as far off the grid as possible because at the height of the economic collapse in 2009, it really could have gone very differently.
After a mentally exhausting, information-packed second day, the highlight of the conference was the Whiskey Bar. Here we had the opportunity to toss away the politically correct questions and go straight for what everybody wanted to know: predictions. Eric Frey reminded us how the panel was decidedly bearish and very wrong last year, while the lone bull Barry Ritholtz was spot on with his prediction that the market has hit bottom. The wannabe contrarian in me has to wonder if the obvious play here is to buy the market now, due to the overwhelming bearishness that has gripped the panel. As I write the markets have hit a three-month high and look poised for further gains. It’s extremely likely the markets will be significantly lower, and if that’s the case then the market is offering the bears a great shorting opportunity in the coming days/weeks. It was Mauldin who made what I believe to be a great call when he said [the trade of the century is to buy the emerging countries after they decouple from the G-7’s, after the next financial meltdown in the markets.]
One of the few speakers who had a more optimistic and bullish attitude was Patrick Cox, who is widely followed by Agora Subscribers. I enjoyed his speech so much that I attended his afternoon workshop and the room was completely packed with about 30+ people standing because they wanted to hear any nugget of wisdom that could help them with their portfolio. Patrick not only brings quite an extensive knowledge base of biotech stocks and ancient Vedic literature, but his admiration of supermodels was clearly evident, as he sprinkled pictures of Megan Fox and Angelina Jolie throughout his presentation. It’s no surprise his workshop was so popular as I’m sure that after 3 days of charts and data, investors were more than a bit cross-eyed. However what really attracted me to his presentation is how he incorporated the Ancient Vedic knowledge of creationism to describe the period we are entering. This is such a refreshing outlook during a time when so many investors and traders are fearful to put money in the markets. Shiva was the god of destruction and that for true value to be created, old ways of doing business had to be destroyed. By virtue of exponential growth of Moore’s Law and the number of Patent’s that have been issued over the last century, we are about to enter a period of technology that will amaze and surprise most. Cox’s message is to embrace the changes that are going on around us at lightning speeds because what is going to come out on the other side is better than anything any of us can even imagine. That is the type of mantra that I want to reiterate over and over because sometimes that is the best outlook to have.
They really saved the best for last because Friday had some amazing speakers from Marc Mayor, the Head of Research at Inside ALPHA who offers an interesting market neutral strategy that guarantees you results if you apply what they teach on how to take advantage of government bailouts and inefficiencies in the markets. I was very intrigued and wanted to learn more as an alternative strategy to my own investment philosophy. Shortly after Marc Faber came on to steal the show as you can tell how respected he is as everybody hinges on every word he says, which to be honest can be somewhat difficult to follow because he tends to move through his slides at rapid speed while highlighting important concepts and numbers with his red laser pointer. And one of the final speakers was William Bonner, the co-author of Mobs, Messiahs, and Markets. Up until that day I hadn’t realized who he was, so when I put two and two together I was really excited to hear his presentation. I read his book last year and have raved about it to just about anybody who asks me which books they should buy if they want to learn more about the markets and how crowd psychology really works. William Bonner has a way of speaking that demands your attention as wisdom and common sense, combined with an ability to tell it like it is that is so refreshing. After reading his book I felt like I received part of an education that the public schools seem to avoid teaching.
The Agora Conference has everything for all personality types of investors and traders. If you want guidance in your investing they have a wide array of newsletters that offer trade suggestions in the natural resource, emerging markets and technology fields to name a few. I spoke to a few of the members who use their newsletters to actively trade, because I wanted to find out which of the authors were crowd favorites. One long time subscriber I spoke with named Harry said that one stock pick in Patrick Cox’s newsletter paid for his entire membership fee. Being a veteran trader myself, I even learned some new techniques from Karim Rahemtulla that I am going to apply in my trading regarding the use of leaps in options trading. His workshop may have been the last of the symposium but I found him extremely insightful in his use of leaps which are traditionally a long term trading vehicle but the way he uses them can benefit short term traders like myself as well. I’m excited to learn more on this approach to utilize the use of leverage and risk control that these trading instruments offer. To anybody who is considering next year’s event, I highly recommend it for the sheer amount of information, amazing speakers, excellent investment ideas they assemble. More importantly, to belong to a community of opportunity seekers that every year like to get together to talk stocks, which just happens to be my favorite subject.
