History Lessons in Financial Markets

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You’re in for a treat today, dear reader. We’re suspending the normal approach of the Weekend Daily Reckoning to clear the floor for a man we’ve discussed quite often in these humble pages: Phil Anderson. We’ll tell you why, and the advantage you can lock in today.

Phil has been an active trader in the markets for over twenty years. You might be aware of him through his real estate research, and his call last year for a coming boom, which he recorded in the DVD Remembering the Future. That DVD caused a stir — to say the least — because it contradicted so heavily with the position of your regular editors, Dan Denning, Greg Canavan and Nick Hubble. But we’re a big tent here at Daily Reckoning headquarters. There’s plenty of room for well-researched, independent ideas. It’s always important, too, to consider the other side of the trade. Australian and US real estate, after all, have gone up.

The first thing you discover about Phil’s work is his incredible knowledge of history. And if you ever want evidence that history repeats in financial markets, Phil can give it to you in spades. That’s how Phil navigated his way — and his money — through the carnage of the GFC: 100% in cash. He was out of the markets before it happened, because he saw it coming. We can vouch for that because we verified the emails he sent out in those years. He must have picked up some screaming bargains in 2009 and later. But we can only speculate on those.

But Phil knew the collapse was coming because he’d seen the same thing happen over and over again throughout history. That’s mostly what his book The Secret Life of Real Estate and Banking is about. But it’s the reason why that’s the key.

That reason, he says, is what happens to the economic rent. The economic rent is not a term many people are familiar with. We certainly weren’t until Phil put it in front of us. It’s not the easiest idea to get your head around, either. But nothing in life worth having is ever easy, we suppose. But the economic rent provides the model for how Phil views the world, where he decides to invest his money and how he interprets current events. Phil is quite adamant that once you understand the concept, you never look at the world the same way. Your investing becomes a lot more profitable too.

Phil’s going to elaborate on this in a series of upcoming videos with Dan Denning in preparation for the launch of a new project we’re working on. You’ll only be able to view them by signing up here. In the meantime, you can read Phil Anderson’s essay here as he takes a look at the Ukraine

Regards,

Callum Newman+
for The Daily Reckoning Australia

Callum Newman

Callum Newman

Callum Newman is the editor of The Daily Reckoning and Associate Editor of Cycles, Trends and Forecasts. He also hosts The Daily Reckoning Podcast. Originally graduating with a degree in Communications, Callum decided financial markets were far more fascinating than anything Marshall McLuhan (the ‘medium is the message’) ever came up with. Today Callum spends his day reading and researching why currencies, commodities and stocks move like they do. So far he’s discovered it’s often in a way you least expect. To have Callum’s thoughts and insights on the current state of the currency, commodities and stock markets delivered straight to your inbox, take out a free subscription to The Daily Reckoning here.
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