Actionable Insights from the 20th Annual Investor Summit [Part 2]

Posted at July 13, 2022 Posted In Investing

In my previous email, I went over some of the key concepts I learned at the 20th Annual Investor Summit. Today, I’ll be discussing the actionable insights I gathered from the presentations and speakers.

The Economy & Consumer Behavior

At the Summit, we had a lot of data shown to us about the state of the economy in 2022.

Here are some interesting data points:

  • In Q1-2022, GDP growth was negative. Was this the beginning of a recession? Remember that approximately 70% of GDP growth in the USA is driven by consumer spending.
  • In the first 4-5 months of 2022, consumer debt skyrocketed up faster than any similar period in the last 50 years. Now consumer debt levels appear to be maxed out.
  • This occurred while it appears from the negative GDP growth in Q1 that consumer spending was possibly slowing down. Are consumers running out of disposable money?
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Consumer behavior was also discussed at a financial conference I attended the week prior to being in Belize. This presentation by a major commercial bank showed meta data on activities and levels in individuals’ bank accounts.

Checking accounts that receive regular consistent deposits (i.e., people with jobs) are staying level. Checking accounts that do not receive regular deposits (i.e., people that don’t work) have been decreasing fast. Is this anecdotal evidence that all the people that have chosen to not go back to work are running out of money?

Fresh Perspective from Speakers

What’s refreshing about the speakers at the Investor Summit is that they are not from your mainstream media— nor are they bankers or politicians. They are people that have developed their knowledge independently of conventional practices.

One surprise guest speaker not listed was Danielle DiMartino Booth, the author of Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America. She worked inside the Federal Reserve for 9 years and continues to study the actions of the Federal Reserve.

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Click here to watch the replay of Daniele DiMartino Booth’s presentation at The Real Estate Guys Investor Summit.

It was interesting to note the fact that the Federal Reserve was holding one of their eight regularly scheduled meetings in the same week she was in Belize with us, sharing knowledge of what they are doing was amazing.

My Key Takeaways from Summit 2022

Hydrocarbon Energy is in short supply.

Hydrocarbon energy is still a critical piece of maintaining the standard of living worldwide that humans have achieved. If we use less energy, per capita wealth will decrease. This is also in critically short supply. The problem is going to take years of significant investment to correct and there isn’t any sign that the necessary additional investment will start to occur anytime soon.

The recession is here and now.

Even if demand decreases due to high prices and we possibly experience a recession, low supplies will keep worldwide prices of energy high. All fiat currencies are losing real value all the time and the only way to maintain your wealth is to own real assets.

Due to the interest rate markets, multiples (or cap rates; the inverse) used to value assets will have to adjust to decrease (increase for cap rates). This means good real estate deals are going to be hard to find without some adjustments in the marketplace.

To put it shortly: We are likely already in a recession. Q1 experienced negative growth. Consumers appear to be running out of disposable money. Inflation is still high.

What Am I Doing About It Now?

As you may know by now, my preferred investments are ownership of real assets— not paper assets like those controlled by the financial industry and the financial system.

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I plan to continue investing in CO2 Scrubbing equipment. The short supplies of hydrocarbon energy plus the need to remove CO2 from the gas stream as it comes out of the well should provide great tailwinds for the demand side for this equipment for many years to come.

I will refrain from real estate investing. Based on my takeaways, I am continuing to look for good opportunities to invest in the production of oil and natural gas but I am not actively looking for real estate deals right now.

I would also consider investments in non-energy commodities for the rest of this decade as well. Based on the continued devaluation of the USD, I believe that the Bitcoin network has all the characteristics to make it a valuable alternative currency and asset.

While I do believe this about the Bitcoin network, I am not saying that a conversion from USD to BTC as a reserve currency or Gold to BTC as a store of value will happen overnight. This is a long-term process and I believe this is the long-term trend.

Therefore, I am working on investments into bitcoin mining equipment which is necessary to maintain the security of the Bitcoin network. My preference would be to own equipment that mine these crypto currencies and are awarded with coins, but we would then immediately sell those coins and return USD to investors monthly.

I don’t want to combine two purposes into one investment, that is:

  1. Getting paid to secure the network
  2. Holding bitcoin in the pursuit of appreciation. Investing for appreciation is not my style. It relies too much on hope for certain actions by other people. My preferred investments generate cash flow, reduce taxes and help to maintain wealth.

What Can Actions Can You Take?

If you also believe, like I do, that:

  1. Cash flow is more important that investing for appreciation
  2. Real assets are better long-term investments than paper assets controlled by others
  3. That the tax code shows us how the government would like us to invest
  4. Protecting your wealth in these uncertain times is vital then continue to watch for investment opportunities that I will present to you that are designed to help you achieve your goals.

If you’d like me to put you on advance notification lists for investment opportunities that meet your goals and interests, please complete my Investor Questionnaire so that I can send you opportunities that interest you and not ones that will just clog your inbox.

Are you ready to see what investments might work for you?

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