Investment thoughts

Investments

Proposition of simple requirements for a modern economy
(trying to boil down to just a few factors)

Fresh Water – how to play, maybe water purification.

Food – moving from a period of falling food prices to one of rising ones, due to
1) competition from energy ( ethanol = burning food )
2) rising living standards, esp. in Asia, and demand for more protein in the diet (meat, which increases demand for grain)

Fuel / Energy – ongoing increases in demand, again from developing markets

Finance – the problem with finance is that, as one wag at Wells Fargo put it: “why invent new ways to loose money when the old ones work so well”
(see below)


Real Estate – can become over built
Location location location


Observations (relating to entities I have an interest in)

Purity Foods, pressured by alternatives, and wheat prices
But pressure will be on conventional pricing as well, therefore a halo or umbrella for pricing

Earthy.com – gourmet, specialty products, pricing
Whole foods actually sees demand go up in economic slow downs as
a) high end customers who would eat out, cook at home more
b) “true believers” stick with products

Cherry Capital Foods – should be able to play on the “local goods” pricing
Exposure is to produce, not grains



Dec 11th CNBC Becky Quick interview with Warren Buffett here


Becky: You know, Larry Bossidy was a guest host of Squawk Box this morning. He said, when he looks out at the market and looks at financials, he can't believe how much they've been beaten down and he says that could be the best-performing sector next year. Is that a view you might share with him?

Buffett: Well, we own a few. What you'll see in the financials, I think you'll see an enormous divergence in the performance. I wouldn't want to be, I wouldn't think in terms of the group there, because some of them have done some very dumb things. John Stumpf (CEO) of Wells Fargo had the best quote. He said it's puzzling to him why bankers have come up with these new ways to lose money when the old ways were working so well. (Laughs.) But they have. And in some places it's really been brutal. Other places, it doesn't make much difference. So I think if the group gets knocked down and you can pick out the better companies, the ones that really haven't gone crazy in recent years, particularly in the real-estate field, it would be a very good place to look.