A Frenzied Carnival of Investment Ideas
It was one rapid-fire day after another at FreedomFest — Mark Skousen’s frenzied carnival of libertarian and conservative ideas and projects, investments, films, debates, dances, and magic tricks.
During the first couple days, I encountered two novel but representative investment ideas.
The first involves Main Street…
If you still believe in stocks, an amiable man named Vincent Foster has a deal for you. It’s called Main Street Capital Corp. (MAIN).
MAIN fills the gap left when banks essentially abandon financing small businesses. It’s a miniature small business version of Berkshire Hathaway. And since 2007 it has outperformed the Warren Buffett vessel.
Its formula is private equity for small but robust businesses facing crisis as a result of their owners’ personal troubles, divorce, or bad health.
The model has been gaining momentum and shows no signs of losing its edge.
The thing is, like nearly all other investments in the stock markets these days in this cannabis-fueled financial era, MAIN is flying high.
Facing a treacherous investment scene, that brings be to the second investment idea: my Cryptocosm.
But what’s the best way to invest in the Cryptocosm? Could it be found at FreedomFest?
When it Pays to Ignore Conventional “Wisdom”
As I was sauntering down the crowded corridors of the Paris Hotel in Las Vegas, an earnest gray haired man came up behind me and whispered an alternative to the treacherous shoals of the S&P: Grayscale Bitcoin Trust.
It offers a way to avoid plunging into the complexities of direct purchase of bitcoins and other super-volatile crypto-plays. It’s essentially liquid bitcoins in a stock market bottle. I said I’d check it out.
In conventional investment terms, it looks overvalued or over-volatile.
To resolve this conundrum, I decided to consult other voices at FreedomFest. And sometimes you learn as much from the errors of others as from their insights…
As I wrote yesterday, Herman Cain and Steve Moore, both prominent Trump favorites for seats on the Federal Reserve, were due to tell us what they would have accomplished if they had not been disqualified.
Now, I am a big fan of both of them, deeming Cain a great Presidential candidate and Moore a pioneer of supply side and cornucopian economics. And I hoped that they would trumpet their plans to launch new compound currencies of blockchains and gold.
I hoped they would show us how to save the world economy from the clutches of central bankers stealing from the future — our children and grandchildren — in order to fund consumption by cronies today.
But when Cain and Moore actually got on stage, they both retreated to the conventional conservative bromide of “commodity-based money.”
Cain suggested oil — a petrodollar. Moore suggested a “basket” of commodities.
The thing is, the scandal of money is not that is lacks backing in Brent Crude or soybeans or bushels of wheat. Attaching money to products already valued in money is a fruitless circle game which accomplishes nothing.
As my more faithful readers grasp by now, money is not a magic wand for central bankers touting their favorite commodities. Backed by a basket of commodities, the value of the dollar could be manipulated merely by changing the commodities in the basket. As a measuring stick for values, real money ultimately is rooted in time, which is the crucial scarcity in life and in economics.
The key rule of measuring sticks is they can’t be part of what they measure. Valued in dollars, commodities cannot define the dollar without hopeless circularity and confusion.
So even after losing the job, Cain and Moore could not bring themselves to advocate a return to real money.
Tomorrow I’ll cover another perspective on real money that I heard at FreedomFest.
Editor, Gilder’s Daily Prophecy