Meeting Minutes

We had a very instructive meeting! We really let the magic of Socratic dialogue take hold of us and ran with it. I want to take this opportunity to thank all those who attended; I believe that the more people and perspectives there are, the more comprehensive our discussions will be and the richer the knowledge that we are able to gain from one another!  In total, we had 9 members attend:

(From left to right) Vance Hall (Sorry for the picture, Vance!), Kevin Day, Jeff Harrington, Vincent Tran, Jeremy Mangon, Nick Vehslage, Patrick Su, Minesh Patel, and myself (VJ Arjan).
(Click on the picture to get a larger image)

Our meeting lasted nearly 2 hours and 45 minutes and was intermittently disturbed by the Cowboys losing badly to the Rams in the background (My apologies to diehard Cowboy fans). The topics discussed ranged from the global and American financial markets, to the future of the American “empire", and to the social issues like drug legislation and public education reform in this country. We also discussed detailed global market strategies and profit opportunities, which I wager will be on many minds given the recent market panic.

However, one thing in particular undergirded our discussion today, and that was that as we are the leaders and decision-makers of the next generation, what kind of world would we like to build for the next generation, our children and those thereafter? Admittedly, the attacks on September 11th were the result of perhaps the two decades of foreign policy that preceded it. So, given that premise, if we do not change anything with the way things are now, then it could be conceivable that our children, tomorrow, may become the target of a terrorist attack of a plane flying into a building, etc. That is one effect of the attack: that we must think about, and become conscientious of what we are doing and how that will affect the rest of the world. The Millennium generation, unlike its predecessors (the Silent, Baby-boomer, and Gen X), are most inclined to free-thinking, and may, by due effort, change the future outcomes given its starting point today.

America
Obama and the Race Card:
We had some tentativeness in deciding how important the race card is going to be in the election that is 15 days from now. If you would do us all a favour and answer the two polls at the right-hand side of the home page: one of them asks you for who you would vote for, and second asks you for who you think is going to win. Perhaps we can get a better idea from you all as well. The consensus is that although the race card is important, it will not be enough to knock Obama off his win for Presidency. Certainly, the economy is slaying McCain, even among the Republicans. Jeff Harrington suggests that perhaps Obama will do what Clinton did in his Presidency: fix the economy, get out of its way, make people happy, and make sure to keep government out of the people’s lives. Time will tell, I suppose.

Drugs:
We started our discussion with the current policy on narcotics. More than 2 million Americans die every year from auto accidents related to alcohol intoxication; smoking has been proven by various studies to directly induce cancer causing carcinogens. However, we determined, that the government views its people as good tax-payers and depends upon the revenue generated from sales tax off of cigarettes and alcohol. In fact, the tobacco and alcohol companies have lobbyists that specifically want to keep other narcotics illegal while keeping their products legal as the reversal will provide competition and a further slicing up of the profit pie. This, however, raises a decisive ethical issue: As citizens, is it ethical to allow large corporations and the government to profit off of another’s voluntary decision to ruin its health?

Jeff Harrington noted that Portugal has legalized all narcotic substances and they have a lower crime rate than the US. The Seventh United Nations Survey of Crime Trends and Operations of Criminal Justice Systems report shows that, Portugal ranks 33rd out of 62 countries, while the United States ranks 24th.
(http://www.nationmaster.com/red/graph/cri_mur_percap-crime-murders-per-capita∫=-1)

Perhaps we should legalize a narcotic like marijuana and put an end to the gang wars that plague cities around the country. In fact, that is exactly what we forecast would occur. Marijuana and other narcotics would be sold by companies legally and would want to get rid of the mobs that are trafficking them. Al Capone and his illegal booze during the Prohibition of the 1920s was broken up by large corporations. Same with the freemasonic organizations that became unofficial gangs that levied railroad taxes on freight companies; large corporations hired Pinkerton detectives to wipe them out.

The Direction of the American Empire:

We were not fully resolute on calling America an empire, but we did come to the conclusion that, if history is any guide, the same complacency or apathy among the citizens that has destroyed other great empires, will destroy ours as well. With record low numbers at the polling booths, Americans don’t seem to care who is in office as there is a general attitude of mistrust towards them. We frankly don’t have the time or patience to care about what we are doing to the world and how that is going to affect us. The average American is quite content not knowing about these issues at all; give them a house, clothes, some bread, a family, and ignorance and they are quite content.

However, this is a red flag of alarm for those of us who do care about the rest of the world. It may be true that most Americans may not be able to comprehend America’s decisions at home and how they affect countries abroad, but if this apathy and willful ignorance goes unchallenged then violence and bloodshed will continue to be spilt.

For instance, although we look favourably upon people like Henry Kissinger in his foreign policy, there are things he has done, or rather crimes, perhaps, he has committed, on behalf of the American people that were very ignoble and atrocious. During the Vietnam war, the purpose of which was to contain the spread of Communism, the Northern Vietnamese Communists began to seek safe haven in Cambodia, which was a neutral country at the time. Kissinger authorized to hard-wire planes that would fly over Cambodia and bomb its major cities while telling the air force pilots that they were flying over Northern Vietnam. This led to 80,000 Cambodian casualties and led the Cambodians to believe that the Northern Vietnamese now eyed Cambodia for spoils. All this to win the war against the spread of Communism. Although the end of containing the spread of Communism may have been noble, the means certainly did not justify it.

If we constantly elect leadership in America that continues to be a moral hazard and we, as citizens, do not take full responsibility and complete awareness of the consequences involved, then I fear that another September 11th is just waiting to happen; and this time it will be our children who may suffer the consequences.

Statistically, the average IQ is about 100, meaning that 50% of the citizens in American will be at below-average IQ levels and may not be able to understand the problem and become learned on our foreign policy. Does this mean that we give the problem up? Frankly, we were all at a loss for words as to what we can do. Kevin Day and Vance Hall, however, noted that it may, in fact, be a good idea to restrict oneself to the things that one, realistically, can change. But this is not for everything; in fact, hardly so. We can actively change what America is, but we cannot change what we are perceived as abroad. Therefore, we must work with what is in our control; what those things are is still a mystery, but I think we have to get started somewhere and tackle the issues one by one. It is indeed human nature and the human condition itself that allows mankind to repeat its past mistakes over and over again. Kevin pointed out that the financial panic we are in was hardly different from the panics that scourged the 60s and 70s, albeit, there is always a different way arrived at. This time it was subprime mortgages, next time it may be commodities, the time after, real estate, etc.

The Next Economy

Alternative Energy:

Emerging industries will be in the alternative energy front. We had some idea of the effectiveness of wind-powered energy, but we have some doubts as to the efficiency of it over long distances.
Tesla SpaceX, run by Elon Musk (multi-millionaire co-founder of PayPal), may become a victim of industrial espionage. Jeff Harrington noted something very interesting that I don’t think any of us had ever taken very seriously. Most of the rockets that have been mysteriously blown apart during takeoff have been rockets carrying government spy satellites. What an interesting insight! This means that countries have been purposely doing this to each other; the same may bode for companies. It is possible that SpaceX may become a victim of this as well as it competes with Boeing and Lockheed-Martin.  Companies have been spilling tens to hundreds of millions of dollars to Boeing and Lockheed-Martin to build rockets for their satellites, and here is SpaceX that can build one for $10 million. We’ll see, of course, what happens.

Global Market Plays:
It is no secret that American equities are being bought up en masse by the Oracle of Omaha, Warren Buffet and Kevin Day contends that there are opportunities here. However, that being said, there are even more spectacular opportunities overseas. Here is a list of equities and ETFs that we compiled as a watchlist:

International Markets -
FXI (iShares FTSE/Xinhua China 25 Index)
ILF(iShares S&P Latin America 40 Index)
EWZ(iShares MSCI Brazil Index)
PBJ(PowerShares Dynamic Food & Beverage)
GUR (SPDR S&P Emerging Europe)

Mining Stocks -
RIO (Companhia Vale do Rio Doce – gold mining)
FCX (Freeport-McMoRan Copper & Gold Inc.)
WLT (Walter Industries – metallurgical coal)

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My hope is that you may benefit by some of this, and that it may help you develop or further enhance your perspective of the way the world is! Let me know if you’d like to receive an invitation to the next meeting, which will be the Sunday after next, November 2nd. I will send out the invitations and details close to a week in advance.

Thank you all and I hope you all have a great week ahead of you!