In The Wall Street Journal Guide to Investing in the Apocalypse, authors James Altucher and Douglas R. Sease provide investors with provocative and essential guidance that will enable them to take advantage of the lucrative investment opportunities that inevitably will arise when disaster strikes. The only book of its kind currently on the market, this indispensible handbook will help savvy investors make money by seeing opportunity where others see only peril.
At the heart of this book lies our observation that historically significant events—the assassination of a president or an arch-duke, an economic depression, or a global pandemic—have a significant, and observable, impact on investments. We believe that, in the face of apparent cataclysm, the professional traders and money managers, along with hordes of ordinary investors, will lose their nerve and desperately seek the safety of cash or even gold. The mad rush to sell will drive the prices of a broad array of securities and other assets far below any concept of fair value. Prices will reflect the investors’ assumption of the worst.
But what if the worst doesn’t occur? In that case all but the most shaken eventually will return to the financial and other markets. Their purchases will then drive asset prices higher, perhaps back to fair value or beyond. In any event, those who did not assume the worst and bought the assets all the others were selling will stand to profit handsomely as prices rebound. This is contrarian investing in the most basic sense. The opportunities don’t come along often, but when they do they can make a huge difference in investment performance for those with a steady hand, an analytic mind, and an optimistic outlook. We call this methodology “event-based investing,” and this book is a guide to mastering it.
What constitutes an event? In this book, we’ll use that term to refer to anything that threatens to upset the normal ebb and flow of markets and economies. Most people think of an event as something that occurs suddenly, such as the explosion of a terrorist bomb or a political assassination. But events can occur over much longer periods of time, ranging from days to years to decades. The Great Depression that plunged the United States into despair was an event, as was World War II, which saved the world from tyranny and reignited our nation’s economy at the same time. Viruses that cause pandemics may hover threateningly in the background for years before suddenly blossoming and doing their worst damage. Global warming scenarios will play out over decades.
Also, different events inspire different levels of fear. Terrorism touches off immediate fear, a pandemic creates gradually escalating levels of fear over a period of months and, at least for the moment, few people appear to be even the least bit worried about the looming global shortage of fresh water. How fast or slow an event occurs and what degree of fear it inspires doesn’t change the possibility of defending against it and perhaps profiting from it, only the time it takes to make a decision and act on it.
Event-based investing is not for everyone. It requires an ability to anticipate seemingly earth-shattering events and to measure the risks appropriately. It also insists that you think unemotionally about the consequences of both the anticipated event occurring and of the possibility that it won’t occur or that the consequences will not be as fearsome as others predict. In The Wall Street Journal Guide to Investing in the Apocalypse we purposely push the concept of event-based investing to the farthest edges of what might be possible. In the coming pages we will closely analyze several potential global threats, the probabilities of their occurring, and the opportunities they might present for the contrarian investor who doesn’t fall victim to hype and hysteria. Some of these events will be man-made: financial catastrophe, for example, stems from human actions. Others, such as pandemics, are rooted in nature. Some of the events we discuss are related: global warming and the coming shortage of clean fresh water have common roots in the burgeoning world population. And some are more likely to occur than others. The challenge for investors is how to get ahead of the curve now to reap profits in 2020 or beyond.
- An Ill Wind: The Fundamentals of Apocalyptic Investing
- Nor Any Drop to Drink: The Emerging Fresh Water Crisis
- Tough Oil
- Is It Just Me, or Is It Getting Warmer? The Looming Threat of Global Warming
- Nothing to Fear but Fear Itself: The Threat of Terrorism
- Close Encounters with the Death Star
- Game Over! The End of Capitalism
The Wall Street Journal Guide to Investing in the Apocalypse: Make Money by Seeing Opportunity Where Others See Peril By James Altucher, Douglas R. Sease pdf