{"id":61255,"date":"2014-10-02T02:48:14","date_gmt":"2014-10-02T06:48:14","guid":{"rendered":"http:\/\/countingpips.com\/?p=61255"},"modified":"2014-10-02T02:48:14","modified_gmt":"2014-10-02T06:48:14","slug":"in-the-stock-market-it-always-helps-to-have-powerful-friends","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/10\/in-the-stock-market-it-always-helps-to-have-powerful-friends\/","title":{"rendered":"In the Stock Market, it Always Helps to Have Powerful Friends"},"content":{"rendered":"
October 2, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

Generally speaking, you don’t become a billionaire by being a shrinking violet.<\/p>\n

Over a boardroom table, across the floor of Senate or down the barrel of a TV camera…you can always rely on very rich people to speak their mind.<\/p>\n

Their views can often grate on your ears.<\/p>\n

Sometimes they can be shrewd. <\/p>\n

But here’s the one thing that rarely changes…billionaires almost always get their way.<\/p>

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You can deal with this fact of life in one of two ways.<\/p>\n

You can bemoan the power that the very rich wield. Write a letter to your local MP or join a protest march. <\/p>\n

That might give you a warm feeling of virtue. <\/p>\n

But here’s another approach…one that lets you actually share in the billionaires’ success.<\/p>\n

It’s as simple as this: analyse the vested interests of the super-wealthy…and align yourself with those interests.<\/p>\n

It would be futile for you to fight the might of central banks and the animal spirits that drive the stock market<\/strong><\/a>. You don’t have to agree with government policies or market movements, but if you read the play smartly, you can profit from them.<\/p>\n

In the same way, you can make more money by backing a powerful horse…even if you don’t agree with what comes out of the jockey’s mouth.<\/p>\n

I got a handy reminder of the power of wealth from last week’s International Mining and Resources Conference here in Melbourne. <\/p>\n

One of the more colourful speeches came from Mr Robert Friedland. He’s the billionaire chairman of African mineral developer Ivanhoe Mines Ltd [TSE:IVN]<\/strong>.<\/p>\n

If you read Australian Small-Cap Investigator<\/a><\/em>, you’ll know that Robert is also the cornerstone shareholder of an exciting little Aussie tech company.<\/p>\n

Robert is a heavy hitter…and he knows how to exert his influence. <\/p>\n

In a remarkable display of truth-telling, he described those who oppose mining projects as ‘twisted deviants<\/em>’. <\/p>\n

He thinks more and more people are unthankful for the supply chains that deliver common objects they take for granted. Robert said:<\/p>\n

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‘People have forgotten where things come from, people don’t understand you either grow it or you mine it if you touch it or use it.<\/em><\/p>\n

‘This is an election year here in the (Victorian) state government on the 29th of November, there is an important election, please vote for the handsome intelligent people that understand where things come from.<\/em>’<\/p>\n<\/blockquote>\n

Comments like this are becoming more and more common. <\/p>\n

People with fiscal firepower will move investment offshore<\/a> if the officials don’t give them a fair go.<\/p>\n

You need look no further than Incitec Pivot Ltd [ASX:IPL]<\/strong>, Australia’s largest fertiliser supplier.<\/p>\n

Incitec Pivot is building its US$850 million ammonia plant in the US state of Louisiana. This is because costs are too high in Australia.<\/p>\n

In September, the company’s managing director Mr James Fazzino praised Louisiana’s prompt approvals process. He openly highlighted the contrast to what Incitec Pivot deals with at home. James said:<\/p>\n

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‘The United States in contrast has an energy policy to encourage value-added manufacturing where Australia has no policy at all.<\/em><\/p>\n

‘The state of Louisiana is open for business. They continue to ring us every month and ask, “What else can we do” because they are about employing people in Louisiana.’<\/em><\/p>\n<\/blockquote>\n

You can’t blame business leaders like Robert and James for giving out a few verbal whacks.<\/p>\n

These kind of remarks help you understand why companies make the decisions they make. They also put governments on notice to lift their game if they want to attract business.<\/p>\n

It’s comments like these that make Liquefied Natural Gas Ltd [ASX:LNG]<\/strong>’s decision to shelve its plans for a gas plant in Queensland, and pursue work in Louisiana, look like more and more of a masterstroke.<\/p>\n

That stock has been a nice little earner for some of my Australian Small-Cap Investigator<\/em> readers. We’ve moved to a ‘Hold’ rating for now…but since we tipped LNG, the stock has returned a monster 858% gain.<\/p>\n

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How You Can Benefit<\/strong><\/h2>\n<\/p>\n

Sometimes the threat of packing up and leaving can be enough for a government to play ball. But you don’t even need the government to come to the party to reap the benefits.<\/p>\n

If a billionaire moves his or her business to make the most of a friendlier regime, you can enjoy a slice of those benefits if you own shares in that business.<\/p>\n

Whether the company produces energy, vehicles, food or widgets…a pro-business setting can work wonders.<\/p>\n

So when you see a noisy, cranky billionaire on the board or the shareholder register…you should feel heartened that a ruthless competitor is promoting your interests.<\/p>\n

That sort of character plays to win.<\/p>\n

And in a game as tough as the stock market<\/a>, it always helps to have powerful friends.<\/p>\n

It’s as simple as this…pay close attention to what billionaires tell governments. Pay even closer attention to what they do.<\/p>\n

Aligning your interests with those of the very wealthy can be easier than you think. And one of the easiest ways that you can do that is by investing in carefully chosen small-cap Australian shares<\/a>.<\/p>\n

Tim Dohrmann+<\/a>
\n Small-Cap Analyst, Australian Small-Cap Investigator<\/em><\/strong> <\/strong><\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

The post In the Stock Market, it Always Helps to Have Powerful Friends<\/a> appeared first on Stock Market News, Finance and Investments | Money Morning Australia<\/a>.<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au Generally speaking, you don’t become a billionaire by being a shrinking violet. Over a boardroom table, across the floor of Senate or down the barrel of a TV camera…you can always rely on very rich people to speak their mind. Their views can often grate on your ears. Sometimes they can be shrewd. […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-61255","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/61255","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=61255"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/61255\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=61255"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=61255"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=61255"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}