Musings from the Bag Lady
I’ve always been something of a
bag lady and have a long history of using bags that can hold a
tremendous amount. Of course I have with me the necessities of
life but I usually am also packing some oddball items: a flash
light — for you never know when you’ll have to evacuate the
subway; food rations — for that time you might possibly get
stuck in the elevator; a good book — for those unexpected
delays; the New York Times crossword puzzle (and pencils) in case the book doesn’t
hold your attention — just to name a few — no wonder the bag
weighs in most days around 15 pounds!
Needless to say I have been
thrilled with the movement to oversized hand bags — where I
can actually carry around all the stuff I really need. And big
bags show no sign of leaving anytime soon. It is safe to say
they’ve transcended the trend and are here to stay and I would
say most women are in love with the big bag. Although the
handbag “David” to those “Goliath” sized totes and hobos — the
clutch — still seems to be giving those hold everything bags a
run for their money — both day and night.
The key
statement for bag fashion in the forthcoming spring/summer
season 2008 is — color is returning. After all those dark
tired colors that prevailed for autumn /winter — freshness and
colorfulness is heralding a comeback. Either fruity and sweet
in graduated pink- orange, sunny yellow shades or fresh and
acidulous from citrus to mint including aquatic shades (bright
“snorkel blue” is a favorite among designers ) rococo red and
royal blue.
Gold: The New Colour Palette for Your
Portfolio?
Now that
you are up on the colors for your handbag purchase what should
be the color palette of your investment portfolio? Well we
think this is the season for gold and blue — Bullion and
Water.
Gold has
gained $70 an ounce or 11 percent since mid August — around
the time the stock market reached a trough. Gold’s ascent has
been nearly uninterrupted. We feel this strength heralds
further gains for physical gold and for shares of mining
companies. Gold had fallen about $50 an ounce from late July
to mid August — a result of selling by hedge fund managers and
economic speculation. These mostly unregulated and highly
leveraged hedge funds acquired large positions in gold, using
it as a tool for speculation. When other markets on which they
had made big bets turned bad- sub prime mortgages for
instance- the funds were forced to sell their gold along with
other holdings to raise cash.
Now that
hedge fund selling has abated a serious impediment to higher
gold prices has been removed. Another reason to expect further
gains is that little further supply is likely to come to
market. Central banks, mainly in Western Europe, have been
selling gold from their reserves as they diversify into other
assets and are thought nearly to be done with those sales.
Supplies from mines rose a mere 3 percent last year while
another usual source of supply — scrap — fell 27 percent.
Meanwhile there is plenty of demand from the flourishing
middle classes in China and India. Also gold ownership has
always been a hedge against inflation. The markets had been
underestimating the Federal Bank’s willingness to quickly and
efficiently lower rates, resulting in shoring up the economy
and we think helping to create future inflation.
Then
there is the risk aversion play. Many analysts expect a
resumption of flights to safety if the US dollar keeps
falling, credit conditions worsen, political hot spots ignite
or if some other bad event occurs that they can’t yet
envision. Gold is an asset people want to own as for
protection for risks they can’t really analyze or get their
arms around.
All these
factors coupled together, we believe make a very strong case
for a much higher gold price.
Water: The Diminishing
Resource
And to
some what is more valuable than gold — fresh pure water. The
fact is that 75 per cent of the Earth’s surface is covered by
water but only 2.5 per cent of it is fresh water and three
quarters of that is locked up in glaciers and permanent snow
cover. According to the World Health Organization less than 1
per cent of the world’s fresh water, is readily available for
human consumption. Pollution and water supply abuse are
rapidly reducing these precious supplies.
There is
no more fresh water on Earth today than there was a million
years ago. Yet today 6 billion people share it. Since 1950 the
world’s population has more than doubled but water use has
tripled. Unlike petroleum, no technological innovation can
ever replace water. Demand for water is as steady as she
comes. Demand is immune to the larger macro forces that
bedevil other investments at times. Demand is unmoved by
recession, inflation or fickle consumers. There are no
substitutes at any price. One can substitute wheat for oats,
coal for natural gas, corn oil for soybean oil and hydro
electricity for fossil fuel generated power but water has no
substitute regardless of price. This most fundamental of facts
is another key to the inexorable and intractable demand for
water that will not abate with time.
The United States loses 60
billion gallons of water every day through old leaky pipes and
mains — that’s
enough water to serve the State of California. The nation’s
alarmingly decrepit water infrastructure will require a
Trillion dollars over haul over the next 20 years, according
to the American Society of Civil Engineers.
Chinese government officials have
recently stated the government plans to spend a $125 billion
in the next five years to help resolve the water problem. Very soon that amount of
financing could become just a drop in the bucket to what will
ultimately be required.
Contaminated water
is deadlier than any other evil on earth; deadlier than AIDS;
deadlier than cancer, deadlier even than the world wars.
During the Second World War one soldier died every 8 seconds;
today one human being dies every 6 seconds from drinking
contaminated water.
Fortune
Magazine predicts “water promises to be to the 21st
century what oil was to the 20th century, the precious
commodity that determines the wealth of nations”. Water might
also be the precious commodity that determines the wealth of
investment portfolios.
For Friends and
Clients of the Bag Lady
I’m very excited to invite you to
an exclusive exhibition of fine art photography by the world
renowned photojournalist Harry Benson. The Opening Night Gala
will take place on Thursday, October 25 from 5-9pm at the
Liss Gallery. The gallery is located at 140 Yorkville Ave in
Toronto. The artist will be present on this evening. I hope
you can join me there. Please
RSVP to Donna MacNeil-Day at 416.512.3694. Visit the gallery’s
website at:
www.lissgallery.com.
Just for Fun: Handbag
Trivia
Louis
Vuitton's monogram canvas handbags have been coveted by
fashionistas for more than a century. These days, the popular
"speedy" and "mini pochette" styles are seen all over New
York's Fifth Avenue and across Beverly Hills. But the French
firm has also launched a number of limited-edition bags that
are much harder to find.
Most recently, a waitlist has
formed for the $34,500 crocodile Mini Girmaud. Worldwide, only
about 15 of these bags will be made available — five of which
will be sold in North America. Visit their website at:
www.louisvuitton.com.
Links of Interest
Here are
websites that I thought you may enjoy.
Contact Us
For more
information, please contact:
Sandra Pierce
Senior
Vice President
Investment Advisor
The Fox Pierce Segal
Group*
E: spierce@blackmont.com | T: 416 512-3696 |
F: 416 221-1958
W: www.foxpiercesegal.com
If you would like to unsubscribe
from this newsletter, please click here.
