Bits and Pieces
Get Ready for – and Profit from – Higher Fuel Prices
When it comes to large-scale and long-term investment trends, I pay attention to three colleagues I’ve been following for three decades: Bill Bonner, Tom Dyson, and Dan Denning.
One of their big bets is on gold. (Which I will be discussing in another blog post.) The other is about energy. And their bet is about profiting from rising fossil fuel prices.
In a recent missive from them, Dan pointed out that the increases we’ve seen during the pandemic are likely to continue even after the lockdown is old news. According to the US Energy Information Administration’s Winter Fuels Outlook, we can expect to see the following increases this year:
* Heating Oil: up 43%
* Natural Gas: up 30%
* Propane: up 54%
* Electricity: up 6%
And if the winter is 10% colder, we could see these prices rise by another 50%.
Propane has seen the steepest increases. And according to Tom, it’s not due to current price action or even the supply squeeze. “It’s really a demand story,” he says. “And the demand is coming from places like India and China, where people use bottled gas to cook food on a daily basis.”
There are many ways to play this, but the one that Tom recommends is propane tanker stocks.
Beware of: Artists That Think and Talk
A friend sent me an article about a group of up-and-coming collectors that “buy art about today’s most pressing issues.” One example was a pair of Mexican rich kids who are spending their daddy’s money on this stuff. “When you buy art, you make everything move,” they say. “You put your money in what you believe.”
My response: I don’t think artists should be allowed to do work on “pressing issues.” I don’t think they should necessarily be executed for doing so, but the threat of execution might help.
Artists – i.e., plastic artists – are, by definition, craftspeople that work in visual mediums. Their talent, if they have any, is in creating visual impressions.
They are ill-equipped to render their thinking about issues into art because they are generally untrained in thinking. To paraphrase Samuel Johnson, “An artist thinking is like a dog standing on its hind legs. It doesn’t do it well, but one is surprised it can do it at all.”
Speaking of art…
The 5 Most Expensive Mark Rothko Paintings Ever Sold
I wasn’t all that into Mark Rothko until I knocked off one of his paintings to cover a TV in the swamp house, my family’s weekend getaway in my botanical garden. I selected Rothko to knock off because his work seemed so simple.
And it was. I finished the piece, about 6 feet by 4 feet, in less than four hours. Here it is, above the fireplace in the living room of the swamp house.
You can’t see it from this photo, but there are several blades of grass embedded in the layers of paint. The reason for that: I painted it outside, on the lawn.
I signed it Mark Rothko Ford.
It’s fooled only one person so far. Maybe it’s the grass. In any case, the biggest benefit I got from the experience, bigger even than saving a lot of money on real art, was that it made me appreciate how great Rothko was at what he did. The tones, the shades, the lack of visible brushstrokes.
If you see a Rothko in the right lighting, you will never forget it.
When I was a child, you could buy a Rothko for as little as $10,000. Today, his paintings are quite a bit more expensive. Here are five examples.
1. Untitled
This 1962 canvas sold at Christie’s in May 2014 for $66.2 million.
2. White Center
This 1950 canvas sold at Sotheby’s in May 2007 for $72.8 million.
3. Royal Red and Blue
This 1954 work sold in November 2012 at Sotheby’s for $75.1 million, doubling its pre-sale estimate of $35 million.
4. No. 10
This painting, done in 1958, sold at Christie’s in May 2015 for $81.9 million.
5. Orange, Red, Yellow
This one, done in 1961, sold at Christie’s for a whopping $86.9 million in May 2012, soaring past its $45 million high estimate.
Their Fair Share
Biden wants the wealthy to pay “their fair share of taxes.” But by any sane standard, they already do. The top 1% in the US pay 40% of all income taxes.
You cannot expand wealth by redistributing it. Wealth will expand slowly if it is distributed naturally through free markets. It’s possible to speed that up, to some degree, from government action, but there is a limit.
The problem with Socialism is that sooner or later, you run out of other people’s money.
Why does no one ask the non-wealthy (and in particular the 30 million working-age men that are not working), to do their “fair share” of the work?
Norm Macdonald, RIP
Norm Macdonald died in September. You probably know that. He was best known as an anchor on SNL’s “Weekend Update” segment, from 1993 to 1998. But I thought he was at his best doing impromptu work, chatting casually with the hosts of nighttime interview shows.
Watch him here.
Literary Letters: Aldous Huxley on Getting Along When You Don’t Agree
In this note to a colleague, written more than 60 years ago, Aldous Huxley explains what’s wrong with American culture today:
“Inhabitants of different and largely incommensurable worlds can live happily together – but only on condition that each recognizes the fact that the other’s world is different and has just as much right to exist and be lived in as his own.
“Once the other’s right to live where he or she is temperamentally and, no doubt, physiologically predestined to live is recognized, there can be something very stimulating and liberating about the experience of being joined in a loving relationship with somebody whose universe is radically unlike one’s own. It becomes possible for each of the partners to enlarge his own private universe by taking his stand vicariously, through empathy and intelligence, within the other’s territory and trying to see what reality looks like from that other vantage point.
“But, alas, what is possible goes all too often unrealized and, instead of federating their two worlds, the temperamental aliens settle down to a cold war.”
Worth Quoting
* “As we saw, presidents Bush, Obama, Trump, and Biden were a godsend… if you wanted to bring America down a peg. Self-serving, stupid, and incompetent – history couldn’t have asked for more. In 1999, the US federal government owed only $5 trillion. Now, thanks to their efforts, it owes more than five times as much.” – Bill Bonner’s Diary
* “Your time is better spent championing good ideas than tearing down bad ones. The best thing that can happen to a bad idea is that it is forgotten. The best thing that can happen to a good idea is that it is shared. Feed the good ideas and let bad ideas die of starvation.” – James Clear
* “A writer lives in awe of words for they can be cruel or kind, and they can change their meanings right in front of you. They pick up flavors and odors like butter in a refrigerator.” – John Steinbeck
3 Words I’m Trying to Work Into My Conversations
* To bumfuzzle is to confuse, perplex, or fluster. You may have heard your grandma or grandpa use it, especially if they are from below the Mason-Dixon Line.
* Amphibology is a phrase or sentence that is grammatically ambiguous – e.g., “She sees more of her children than her husband.”
* Bindlestiff is another word for a tramp.