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Profits of Chaos

Austrian Economics, Investing and Entrepreneurship. With Professor Peter St Onge. If you haven’t yet, sign up for free updates here.

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1419921337_9353555d5f_m[Excerpt from the January Austrian Investing Monthly Newsletter. Download free at St Onge Research.]

Does cheap oil cause recession?

Not when Oil Supply is Soaring.

For the past year, the price of oil has been plunging, spooking markets going into year-end. Oil is one of Wall Street’s favorite recession indicators. So are they right to worry?

In short, no. Falling oil prices today are supply-driven. Meaning that today’s cheap oil is a boom indicator, not a recession indicator. Because cheap credit subsidizes investment, and oil is one of the most capital-intensive industries out there.

It’s actually better than that: [click to continue…]

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Will Robots Eat the Poor?

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pack_of_harvestersWhat happens when robots and AI start taking all the jobs? Counter-intuitively, it’s the poor who will benefit the most. And it’s the upper-middle class who will complain the loudest.

Do robots eat poor people?

No. But they will nibble on the upper-middle class. And the reason is simple: the affluent have a larger gap between what they earn today and what would happen if their job function became obsolete. [click to continue…]

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Megacorp_HQOver the past century economists have hotly debated whether the dynamic forces of capitalism are taking us to a future dominated by a few Mega-Corps, or will these dinosaurs be eaten by small, entrepreneurial firms.

The debate’s modern terms were set in the 1930’s, as Progressives like Richard Ely and John Commons argued that the Mega-Corp future was inevitable. [click to continue…]

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[Excerpted from the November Austrian Investment Monthly. Download a full copy at St Onge Research]

“Big Data,” the latest and greatest data fad, makes the Austrimatrixan approach even more important to investors. How can savvy investors take advantage?

One key advantage of “Austrian” investing is using theory to guide your choice of data. This advantage is growing massively as Wall Street falls in love with the “Big Data” fad.

In “Big Data,” you toss the kitchen sink into a huge correlation, run your supercomputer, and out pop your recommendations.

What could possibly go wrong? Lots.

[click to continue…]

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piano-cycleThe past few years bond returns have been pathetically low, while stocks have been on a rip.

As this boom gets old, prudent investors face a difficult decision: if you want to taper out of stocks, where do you go?

The usual suspects all have their own problems. Commodities are on a strong down-draft, and you don’t “catch a falling knife” as they say on Wall Street.

[click to continue…]

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