Christine Benz on volatile markets, Berkshire’s cash, downgrading GE, and two fund picks on this week’s episode.
Investing Insights: Downgrading GE And Jeremy Grantham's Speech
Vanguard’s move into PE may change the landscape forever
This week on the podcast Jeremy Grantham speech at the Morningstar Investment Conference. Christine Benz puts recent volatility in perspective and offer several coping strategies how to pick multifactor ETF. Greg Warren On Berkshire's cash hoard why we downgraded GPE and to merger arbitrage fund pic's so let's get started. Here's part 1 of Grantham's race of our live speech. In the interest of full disclosure I should say that I am all in on the topic of climate and toxic damage to the environment. 98 percent of my net worth is either in two foundations or is committed to it. Fortunately I come from a vastly overpaid industry and so that still leaves me enough to have two houses and a Tesla Model 3. If they would just deliver it to me I'm going to give you first a broad overview of this topic which I'll read to save time because if I had libelled this will be here all day and then I'll give you lots of backup data with slides you could call this presentation the story of carbon dioxide and homosapiens. You may not know but if we had no carbon dioxide to toll the temperature of the Earth would be minus 25 degrees centigrade and we would be a frozen ball with no life except bacteria perhaps and 200 to 300 parts per million of carbon dioxide has taken us from that frozen state to a pretty agreeable world we have today. CO2 is therefore thank heavens a remarkably effective greenhouse gas. The burning of fossil fuels has played a very central role in the development of civilization.
The industrial revolution was not really based on the steam engine it was based on the coal that ran the steam engine without coal we would very quickly run through all our timber supplies and we would have ended up with what I think of as the great timber wars of the late 19th century. The demand for wood would have quickly denuded all of the great forests of the world and then we would have been back to where we were at the time of Malthus living at the edge of our capability with recurrent waves of famine as every other creature on the planet does a few good years. The population expands and bad years you die off a gallon of gasoline has at least 400 hours of labour equivalent. It means that ordinary middle class people have the power that only kings used to happen in the distant past. And what that has done that incredible gift of accumulated power of millions of years is to catapult us forward in terms of civilization in terms of culture and science. It's created an enormous economic surplus with which we could do these things for the first time in history. And above all agriculture has benefited allowing our population to surge forward. The sting in the tail. However this has left us with seven point five billion people going on 11 or so billion by 21 hundred and that can only be sustained by continued heavy heavy use of energy. Fossil fuels will either run out destroy the planet or both. The only possible way to avoid this outcome is rapid and complete decarbonisation of our economy. Needless to say this is an extremely difficult thing to pull off. It needs the best talent and innovation which will almost miraculously.