Because the pandemic has devastated the world economies so rapidly, most investors have been frantic liquidating all their investments except their real home residences [cash, government securities and gold holdings to cover their margins as well as short-term debt. With respect to the fundamentals gold is under-valued because it has not increased in value relative to the economic meltdown and market volatility. For this reason I believe it’s under-valued with considerably upside not only a flight to safety but also an enormous profit opportunity.
As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Albert Goldson.
Albert is the Executive Director of Indo-Brazilian Associates LLC a NYC-based boutique think-tank and global advisory firm that provides counterintuitive, contrarian, and often prescient, over-the-horizon geopolitical risk assessments and investment strategies. Mr. Goldson’s memberships in a wide-spectrum of professional organizations gives him access to influencers and decision-makers at the highest levels. Furthermore Mr. Goldson is a contributing writer, is quoted widely in the international media, and is a regular guest expert panelist on cable TV.
Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
Iwas able to leverage my extensive working experience in operations, contracts and contract negotiations and apply them to finance to fill the information gaps to reduce risk and eliminate inefficiencies. By speaking the “language” of each discipline I am successfully able to reduce miscommunications between departments which eventually enabled closer and smoother cooperation.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
For many years I was a contract manager at a large government agency and handled the negotiations between the agency and private firms that perform architectural & engineering work. There was one notable negotiation that was exceptionally unusual. The two sides brought their technical representatives to discuss pricing for a contract modification. The lead engineers had worked with each other for many years since the inception of the contract and through many modifications. Furthermore each and every previous modification was negotiated to the satisfaction of both parties and the work was completed satisfactorily within budget and on time.
This is why the initial warm and friendly greeting by these engineers was puzzling because the actual discussions were outright hot & heated featuring screaming, accusations, unprofessionalism, you name it. Before long several representatives on each side joined in creating what I would call a verifiable verbal “Battle Royale” right out of the WWE script. As the negotiation moderator I decided to let this play out until both sides burned out from psychologically and vocal exhaustion. Afterwards I would then “pick up the pieces” and establish either a reset point for further discussion or declare a cooling off period and reschedule the negotiation.
Almost as if on cue the two sides calmed down and actually worked out the particulars of the contract modification to each one’s satisfaction. Like a bookend both sides’ lead engineers and their representatives gathered together in total harmony as if the heat negotiations never existed.
The lesson? Even professionals have to vent or blow off steam in an unusual yet productive way. This unusual professional relationship is more often than not an unplanned, informal “Battle Royale” between two sides who have a worked together professionally and respectively for a long-time. For this reason as a moderator it’s best not to interrupt their “fun” as long as the process is mutual and let it play out because it’s a peculiar yet effective way of professional bonding. The infamous quote in the movie The Matrix Reloaded summed it up best, “The only way to really know someone is when you fight them.” Admittedly it’s great theater.
Are you working on any exciting new projects now? How do you think that will help people?
I’m creating a teaching program through a mix of contributing articles, speaker engagements and workshops that promotes the benefits of applying counter-intuitively thinking regularly, not as something project-specific. This counter-intuitive learning eventually spills over and embeds itself in your lifestyle. Like music it’s an art form that when practiced regularly continually grows and deepens. The myriad of lessons come from my personal experiences and from those who are far wiser than I am.
The challenge is teaching counter-intuitive thinking because everyone has been almost indelibly programmed since childhood to follow established paths. The challenge is to convince someone to consider the possibility and effectiveness of counterintuitive thinking as an additional tool rather than as mutually-exclusive choice between two paths.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
About 10 years after graduating from college I needed an update, a reboot as to where I was headed in my life and career. With respect to a non-family member I attended a course taught by a lifestyle coach who was quite different from any other that I’ve heard about. He taught how to indelibly incorporate counter-intuitive thinking in all phases of your life. This was necessary if you want to see and exercise the options that already exist and goals that are closer within reach than you imagine.
One memorable gem he presented was that hard work is always required for what you want. However sometimes psychologically we overshoot our goals or dreams because you might already have achieved it but in a far different form than you imagined. It’s like continuing to run at breakneck speed well past the finish line and not realizing you crossed it long ago.
Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?
- Firstly limit your viewing of news on coronavirus because it only intensifies anxieties
- Secondly every generation has its challenges, this is yours, a story to tell your offspring of toughness and resiliency just like forebearers during Great Depression, WW II, Vietnam, 1970s, etc.
- Thirdly this is a once-in-a-lifetime opportunity many will ever have of preparing for next stage of your career and life. This is a personal reset, deep evaluation of what you value and what is genuinely important by purging time-wasting old habits and establishing refreshing new routines and rituals. The ultimate dual-purpose is while staying home you “flatten the curve” while self-reflection and action helps you get ahead of the curve.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing $500 every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?
The modern global markets have never encountered a pandemic that has impacted the entire globe. There’s no playbook or historical case studies that anyone can use as a reference to find a solution and for this reason we live in an ultra high-risk environment.
For the short-term (one year) I advise my clients to become as liquid as possible which means investing additional funds in cash or cash equivalents such as money market and short-term government securities.
Despite recent losses one should keep investments already in the S&P because at a future date, mostly likely in the long-term, prices will rebound. Price movements, often highly volatile, will be driven far less by fundamentals rather by many other factors such as the ongoing impact of the pandemic, progress of developing a vaccine, economic fallout, and public policy decisions.
Additionally I have warned of a possible bank holiday last utilized in March 1933 by FDR for 5 days because of severe market turbulence. This means a total shutdown of the financial markets.
Finally carefully identify and review any illiquid assets in your portfolio. Many investors aren’t even aware they have them in their portfolio and are often touted or described as reasonably liquid assets.
Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?
This is a long-term play but oil prices are a once in a generation opportunity. Focus more on indices rather than specific companies but each firm will have its unique hidden and unexpected problems recovering from the oil glut and recession. For the following I forecast a 10–15 play, like planting the seeds of a redwood. Even a modest economic uptick in 2–3 years could reap profits.
I had forecast the plunge in oil prices in two published articles in November and December 2019 to the current price range when oil was trading at $60/bbl. Demand destruction for oil is the result of record storage inventories.
The stages of a revival of oil investments are as follows:
- Firstly the world economy will eventually recover albeit not at the pre-pandemic levels.
- Secondly the economic growth will be slow & uneven. Record inventories will first have to been drawn down to have an upward pressure on prices.
- Thirdly, US shale oil has suffered an acceleration of bankruptcies resulting in liquidations or consolidations.
- Fourthly, large standard oil projects by the oil majors were put on hold, mothballed and investments in large projects had halted well before the pandemic. Because of a shortage of oil sources and increasing demand, development of these sources will resume.
Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?
GOLD. Because the pandemic has devastated the world economies so rapidly, most investors have been frantic liquidating all their investments except their real home residences [cash, government securities and gold holdings to cover their margins as well as short-term debt. With respect to the fundamentals gold is under-valued because it has not increased in value relative to the economic meltdown and market volatility. For this reason I believe it’s under-valued with considerably upside not only a flight to safety but also an enormous profit opportunity.
I was quoted in an industry article in early 2019 which I forecast a gold price range of $1800-$1900 end of 2019. Today it’s currently around $1700.
Are there alternative investments that you think more people should look more deeply at?
Because of the dependency on teleconferencing tools for remote work, there are fascinating possibilities with the growth of technology companies in this field. I’m quite keen about hologram technology for the purposes of one-on-one meetings and conferences — an almost ‘you are there’. Despite a high start-up cost, the benefits of ‘meeting’ with your counterparts globally on a short-term notice will outweigh the costs.
There are several firms in the embryonic stages in developing and refining this technology to scale and to make it affordable to most businesses. The challenge is to separate the chaff from the wheat in determining which companies can develop the technology and produce it to scale.
Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?
Technology: Careful look at the history of leading with changes in their industry and becoming more efficient and more competitive. Many firms always lead yet spend more time back-tracking and adjusting while others are more circumspect before implementation. Examine track records. Is the mindset of the decision makers just as nimble & flexible as the new technology.
Company Culture(s): Observe the similarities and differences between various corporate layers from executives to salt of the earth workers to determine future of the firm. Same culture or multiple cultures within layers cause conflicts, inefficiencies and miscommunication. Some departments lead, others lag, how far the gap? How do they fit? Like homogenous ethnic groups some live by the shore, inland, mountains, urban, rural, etc. — same people different environments and daily interactions.
The Hobbies of Upper Management, Decision Makers and Influencers. You want to see a high diversity of long-time sports & hobbies by the decision makers. The more diverse and changing the sports & hobbies the greater creativity is presented at the conference table. Engaging in the same or similar sports & hobbies strongly indicates an almost cult-like corporate dependence or domination by a few top people who don’t want to be challenged and seek obedience and conformity.
Architecture & Interior Design. Much can be said for firms in the buildings they occupy, specifically corporate offices. Operational venues are for practical purposes. Ground up from scratch. Moving in existing structure partial story shared with other companies yet interior design is paramount.
Investors rarely have access to regular offices, perhaps conference rooms for meetings much garner when walking to the bathrooms, layout, wall decorations, are the offices numbered with name plates, clear or frosted windows, sizes of conference rooms (clear, frosted or solid). Colors, texture, lighting. This all may seem quite esoteric but the assessment: how do you feel? Relaxed, comfortable, weary, nervous? Establishing the mindset of the management and workers coloration, segregation by class.
Communication: Literature: How do they communicate to the public? To the investors? Grete you by name or generic title. Tone of correspondence feel personal or generic, welcoming, standoffish. Customer service general inquiries. Directly with an investor representative.
On a script which is understandable. It’s what happens further into conversation, off-script, like jazz required improvisation. Remember or repeat your name? Tone of voice when dealing with deeper issue?
They are nervous, defensive and defer because of entitled callers who’ll report them at the drop of a hat for the most nonsensical reasons through the post-talk survey.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“The Titanic was built by professionals. The Ark was built by amateurs.”
Any task or desire from the imagination always appears daunting. Lack intellect, talent, contacts, graduating from the ‘right’ schools, not having a mentor. It’s always what appears to be a supposedly insignificantly thing that’s the catalyst that sparks success, that small bridge along the critical path to achievement.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂
Historically the biggest threat to the health & vitality of the world’ population is disease. Incredible advances have been made to reduce the transmission of diseases through sanitation. One critical component is the reduction of open defecation which adversely impacts the health of those citizens, reducing their life expectancy, lowers work productivity and increases health care costs. Although the UN which the UN has done an admirable job I believe far more can be achieved.
I would create a global public-private partnership with the largest most well-founded global private firms to accomplish the following:
Manufacture and distribute low cost, low tech, and low maintenance toilets.
Aggressive and relentless education to these populations on the benefits of the use of toilets, a challenge because these groups have been engaged in this activity for centuries. The process of unlearning and then relearning is far more difficult than its seems regardless of the obvious health benefits.
Well intentioned programs fall by wayside during crisis and never restart or gain traction sometimes decades afterwards. Private industry and government collaboration.
Thank you for the interview. We wish you only continued success!