8/22/23 –




An 8/22/23 NYT headline: “The massive central U.S. heat wave is expanding and could set hundreds of records.”


There are two aspects of equity investing. The quantitative, where relevant are future cash flows and therefore equity valuation, and the qualitative - the context of things - about management and now increasing about Nature and global heating. A really useful 8/17/23 Financial Times article is titled, “How investors are underpricing climate risks


“In a world that is rapidly becoming more vulnerable to extreme weather events, outdated assumptions about asset values also need recalibrating. The big danger is of a ‘climate Minsky moment’, the term for a sudden correction in asset values as investors simultaneously realise these values are unsustainable. So far, businesses and investors have paid less attention to the physical effects of climate change and more to the costs and risks of decarbonising, as the world tries to limit the rise in average global temperatures….


Equities have not priced in climate change risks, research by the IMF and others has repeatedly shown…(So does our 6/29/23 post)…Cambridge Econometrics…recently crunched numbers for Singapore’s GIC. The sovereign wealth fund’s long-term investment horizon - and the city-state’s vulnerability to flooding - make it unusually mindful of climate risks. It wanted to know how a portfolio composed of 60 percent global equities and 40 per cent bonds would fare under varying climate policies.”


Here are the general results:


Net Zero Scenario -  cumulative returns over 40 years were 10 percent lower than a baseline that assumed no climate change.

Pessimistic Scenario - cumulative returns were 40 percent lower than the baseline. “…though some feel that the outcome could be much worse than that given the unknowable levels of disruption (also climate feedback loops) that such a rise might trigger.


So given the above uncertainties – both analytical and political – what’s an investor to do? Equity investment requires a rather optimistic mindset. But all things considered, 1) We will not overpay for stocks already optimistically valued 2) Since stocks are long duration (payback) investments, we would decrease the duration of our portfolio by holding around 10% in cash.




The best action for portfolio owners is to make sure that the political will exists to tackle global heating, requiring a sustained effort and investment.



Is climate change all a plot to reduce American freedoms? Here’s a disproof from the bottom-line. The 9/3/23 Washington Post contains an article headlined, “Home insurers cut natural disasters from policies as climate risks grow”.


“In the aftermath of extreme weather events, major insurers are increasingly no longer offering coverage that homeowners in areas vulnerable to those disasters need most.


“At least five large U.S. property insurers – including Allstate, American Family, Nationwide, Erie Insurance Group and Berkshire Hathaway – have told regulators that extreme weather patterns caused by climate change have led then to stop writing coverages in some regions, exclude protections from various weather events and raise monthly premiums and deductibles. Major insurers say they will cut out damage caused by hurricanes, wind and hail from policies underwriting property along coastlines and in wildfire country…


“The variability in weather patterns means insurance companies can no longer rely on the previous risk projections that helped them make decisions. As insurers leave certain markets or cut certain perils out of policies, some homeowners are going without insurance. State governments have erected insurance policies of last resort.


“But even state-backed policies must face climate risks. ‘When you see the insurance companies pulling out en masse because the cost of rebuilding homes in Florida is bankrupting them,’ said Ben Jealous, executive director of the Sierra Club, ‘its either hubris or folly to think the state wouldn’t be bankrupted stepping in to help.’”


Climate change is getting more real every day. Both Democrats and Republicans need to start bailing the lifeboat.



9/30/23 –


Without the help of some recalcitrant Republicans, the House finally passed a 45-day stopgap government funding measure, that omitted aid to Ukraine. How can the congressional House govern a nation, when they can’t even govern themselves. And how can former president Donald Trump again govern a nation, when he obviously can’t even govern himself. America needs a moderate-right Republican party to help solve the real problems we have in common: climate change, lack of an immigration policy, social problems of distribution, and increasing government deficits.


The humane U.S. rule of law (an external standard applicable to all) also requires citizen self-governance, in order to preserve true freedom for society and to preserve liberal society’s ability to parallel process (do more than one thing at once). Polarization and gridlock don’t solve problems. A stark alternative to MAGA manufactured social chaos is authoritarian rule, which is the likely goal of some in Congress.


Is that what you really want?



The U.S. stock market is just waking up to the fact that r, the cost of capital, is high and rising.





We voted our proxy in favor of the merger between Newmont Corporation and Newcrest Mining Limited.





GO TO EARLIER 2023, 2022 POSTINGS (suggested)