Afghanistan and Green

What we are seeing play out in Afghanistan is tragic and disturbing. If we put aside the argument on why the U.S. has been imbedded there the past 20 years, and look what has transpired the past weeks, the conclusion has to be, that it is a disaster for the country of Afghanistan, for many of the citizens of the country and will have repercussions beyond its own borders. I will not go into a long discussion of the history, the mistakes, the costs in lives and money, the frustrating feelings of despair and lost hope, but what I think is relevant for the markets is what affect this has on the U.S. going forward.

Many Americans say good riddance, no more troops, advisors or money will be sent. Many Americans feel that the country should take care of itself. There is however a real fear that the country, now controlled by the Taliban, could be a contributor to increased terrorism in the west. In addition the refugee situation that is developing will affect many countries in the region. It is understandable that the U.S. has chosen end it’s commitment to the country, but hard to defend the quick, apparently poorly planned exit. And if it is true that the locals which helped fight beside American troops, are not looked after, it may well have consequences going forward.

I had a long discussion with my good friend Steen Jakobsen last night. We don’t always see things the same way, but I respect his views and his opinions. He was telling me that what we are seeing unfold in Afghanistan is the beginning of the end of the U.S. acting as a global policeman and it being perceived as a special nation.  My reply to him, was that I think that happened 5 years ago with the Presidential election of 2016.

(Watching the U.S. Senate be overtaken by rioters seems like something that shouldn’t happen in a country that is the de facto global policeman.)

For Europeans or other nations that have seen the U.S. as the leader and global policeman, that may be changing! Am I being to harsh, reading too much into the U.S. taking a stop loss and exiting an unfortunate situation?

Quite possibly, but it will be interesting to see if what is unfolding will have consequences for the USD.   Will countries such as Iran see this as a weakness. Will China see an opportunity to test the current administration?

I wrote a piece on the 12th of August which focused on potential investment opportunities that would benefit from the growing focus on renewables in general, but especially after the recent climate report. I argued that western governments will be pushed and pulled into focusing more resources in these types of investments.  Steen and I also discussed what we are seeing and hearing in terms of public pension funds, and other large pools of assets. One undeniable truth is that more and more money is being funneled into renewables and ESG focus continues to grow. 

It is not just the Americas or Europe that are pushing for change, but also China and India:

China: https://www.ft.com/content/7bdbacc1-b7bb-49f7-8d75-e833b39202f3?shareType=nongift

India:  https://www.rechargenews.com/energy-transition/modi-pledges-massive-green-hydrogen-quantum-leap-to-indian-energy-independence/2-1-1052701

There will be companies that win and companies that lose in the current race to provide energy via wind, solar, hydrogen, nuclear etc. It is difficult to keep up with technology, new companies, mergers etc. etc.

Unless you have time to focus on the rapidly changing developments, ETF’s seem like a good medium term/long term investment.

Below are some of the names we are following:

Strong performance on a 12 month basis, but there has been a correction lately and now may be a good time to start building a portfolio for the medium/long term.

From the lows last March to the highs in Jan/Feb the renewable sector was flying. There has been a health correction since Q1 with the five below down between 16% and 40%.

And lastly a few other thoughts:

  1. It feels like the energy companies will be in for some even better days going forward. Depending on your investment preferences, I would not be surprised to see oil companies do well in the months to come.

Continued bounce back in global demand, global supply will not bounce back as strong (Shale), ESG affects hurt investment in developing new reserves, more power to OPEC+ to control pricing and the real possibility of disruption to the market.

2. Gold:  I keep reading that gold is old news. That it is not the investment of choice these days for those that are worried about the increased creation of money, the real potential for inflation to not be just a passing phenomena, and  that bitcoin/crypto is the new gold. The under 40’s generation does not buy into gold as being a storage of value, crypto is understood and accepted as the cheapest, most secure method of stashing away for a rainy day. The argument makes sense as more and more mainstream businesses, investment vehicles and platforms begin using crypto. But I still think gold is in the clam before the storm and that we will see a rally back up to test $2,000.  Watching $1,820, $1,865 levels to break to bring back interest in gold.

At the end of this month, I will no longer be employed at Minter Markets. After 3 ½ years, the business is now in the capable hands of Kent Torbjørnsen and I am convinced he will do a great job for our clients going forward.

I will continue to write my views and thoughts, although on a biweekly basis, going forward. Should you want to put on the new mailing list, please let me know.

Contact us if you are interested in receiving real time trading signals. In doubt? Check out our track record below!

TickerDate OpenedEntry PriceStopTarget PriceCurrent Price% Change
LONG Saga Pure ASA (SAGA:xosl)2021/06/282.922.703.502.865-0.34%
LONG Copper (COPPERUSSEP21)2021/07/05434.00415.00490.00433.45-0.13%

Visit our Position Tracker to look at all of our realized trades and proven track record! 
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– Mark W

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