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Note: Page numbers in italics refer to charts and graphs.
aerospace companies, 130–31
AeroVironment(AVAV), 76–77, 87
Africa, 72
aging population, 23, 41
agriculture
and oil demand, 71, 72, 76
and water demand, 49, 53, 55, 59
AIG, 134, 140–41
airlines
and cyberterrorism, 105
and pandemics, 32, 35
Alaska, 65
Alfred P. Murrah Federal Building bombing, 97
Alpha Pro Technologies, 45, 45–46
alternative energy
back-door strategies for, 76–77, 87, 88–89
biofuels, 71
and fear about global warming, 85, 85–86
and fossil fuel crises, 76, 82–83
front-door strategies for, 88
geothermal power, 83
hydropower, 49, 82
and industrial economy, 68
nuclear power, 82–83, 87–88
solar energy, 82, 86
and subsidies, 86
tidal power, 83
wind power, 76–77, 82, 87
American Ecology (ECOL),88–89
American States Water Company(AWR), 60
Analogic (ALOG), 111–12, 113
anthrax, 35, 101–3, 115
A123 Systems (AONE), 92–93
Apophis(asteroid), 120
aquifers, 53
Arab oil embargo, 3–4
Archer Daniel Midland (ADM), 76
ArcSight (ARST), 114
Argentina, 4
Arizona, 52–53
Ashland Inc. (ASH), 57–58, 58
Asian financial crisis of 1997, 5–6
assassinations, 1–2
Asset Acceptance (AACC), 151
assets, borrowing against, 150
Astec Industries (ASTE), 148
Asteroid 2008 TC3, 117–19
asteroids, 117–32
Apophis asteroid, 120
Asteroid 2008 TC3, 117–19
back-door investing, 130–31
consequences of, 120–23
contingency plans for, 125–26
fading the fear of, 128–30
front-door strategies for, 131–32
investment implications of, 126–32
likelihood of, 123–24, 126
and media-driven fear, 128–29
Near Earth Objects (NEOs), 117–18, 120, 123–24, 128
and stages of grief, 127–28
and timing, 24
AstraZeneca, 41
ATM usage, 113, 114, 134, 142
automobiles
electric vehicles, 67, 71, 83, 84, 92, 93
and emissions technology, 89, 92
hybrid vehicles, 67, 71, 83, 90, 92–93
baby boomer population, 23, 41
back-door investing strategies
for alternative energy, 76–77, 87, 88–89
as apocalyptic investing principle, 22–23, 157–58
for asteroid strikes, 130–31
for energy efficiency, 91
for financial collapse, 148–50, 162
for fresh water shortage, 56–57, 59, 60, 160
for global warming, 161
for oil crises, 56, 76–77, 160
for pandemics, xxiii, 39–41, 159
for terrorism, 110, 161
Bank of America, 142
banks
and collapse of capitalism, 142
and cyberterrorism, 105–6
and derivative trading, 149
See also financial collapse
barometer, stock market as, 2
battery technology, 71, 92–93
Bear Stearns, 10, 140
Big Brother, 112–13
BioCryst Pharmaceuticals (BCRX), 42–43, 43, 156
biofuels, 71
bioterrorism, 35, 101–3, 115
Black Monday, 5
bomb detection stocks, 111–12
bonds, 9, 14, 15
Borg-Warner (BWA), 89
bottled water, 60
BP Group, 61–63, 72
Brazil, 4
bubbles
advantages of, 145–46
and irrational optimism, 156
opportunities in, 6–7
and portfolio value, 20
See also dot-com bubble
Buffett, Warren, 13, 56
Cameco (CCJ), 88
cap and trade, 80
capitalism, xxi. See also financial collapse (the end of capitalism)
carbon emissions, 80, 89–90, 92
Cash American (CSH), 151
Centers for Disease Control (CDC), 36
Chernobyl, 82, 100–101
Chesley, Steven, 118
Chevron (CVX), 73
Chile, 4
China
and North Korea, 155
and oil demand, 70, 72
space program of, 127
China BAK Battery (CBAK), 93
China Security & Surveillance(CSR), 114
Cisco (CSCO), 91, 116
Citigroup, 141, 142
Citigroup (C), 106
climate change. See global warming
CME (CME), 149
coal, 82–83
Coca-Cola, 60
collateralized debt obligations, xix
comets, 121. See also asteroids
commercial paper, 141
commuting, 71–72
Comverge (COMV), 91–92
Connecticut Water Services(CTWS), 60
Conoco-Philips (COP), 73
Consolidated Water Company(CWCO), 56
consumerism, 137–38, 144
contrarian investing, xvii
corporate corruption, 6
Crane Co. (CR), 59
crash of 1987, 4–5
credit default swaps, 140–41
Credit Suisse, 54–55
CSFB Dedicated Shortsellers Index, 17
Cuban Missile Crisis, 3
cyberterrorism, 104–7, 114, 115–16
Danaher (DHR), 56
debt collectors, 151–52
Deepwater Horizon accident
and difficulty of deepwater drilling, 65
and East Coast oil exploration, 68
explosion and oil spill, 61–63
investment opportunities of, 16
and limited oil supply, 63
deflation, 150
depressions, 151. See also Great Depression
derivatives, xix, 10, 146, 149
desalination, 54–55
Diamond Offshore (DO), 78
DigitalGlobe (DGI), 114–15
dirty bombs, 96, 100
disease, xxi. See also pandemics
diversification
emphasis on, 9
importance of, 13–14
and long-term investing, xix
dividends, 73, 74, 75, 75
DMI Industries, 77
domestic terrorism, 97
Donaldson Company, 57, 57
dot-com bubble
economic effects of, 133
and Great Financial Collapse of 2008, 138
positive outcomes of, 146
and short selling, 17
and subsequent bust, 145
and terrorist attacks, 6
Dow Jones Industrial Average
and Arab oil embargo, 4
and Asian financial crisis of 1997, 5–6
and Great Depression, 3
and Kennedy assassination, 2
and 1987 market crash, 4–5
and World War II, 3
Drake, Edwin, 63
Ducommun (DCO), 131
East Coast oil exploration, 68
Echelon Corporation (ELON), 91–92
electrical infrastructure, 148
electric vehicles
back-door strategies in, 92
and battery technology, 71, 93
energy-efficient charging of, 84
and oil conservation, 71, 83
and oil prices, 67
Emergent BioSolutions (EBS), 115
emerging nations, 48
emissions, 80, 89–90, 92
energy efficiency, 83–84, 90–93
Energy Recovery (ERII), 56, 157
Enerl (HEV), 93
Enron, 6, 17, 146
Environmental Protection Agency(EPA), 89
ethanol, 76
event-based investing, xvii–xviii, xx
EWH, 38, 38
exchanges, 149, 150
Exxon (XOM), 73
Fannie Mae, 139
fear
fade-the-fear principle, 19–21, 157
levels of, xviii
media-driven fear, 128–29, 156
and tracking fear trends, 44–45, 45
Federal Deposit Insurance Corporation (FDIC), 134
financial collapse, 133–53
and apocalyptic investing principles, 162
back-door strategies for, 148–50, 162
crisis of 2008–9, 135–45 (see also Great Financial Collapse of 2008)
fading the fear of, 148
front-door strategies for, 150–53, 162
investment implications of, 145–53
as man-made event, xviii
potential for future crises, 153
and timing, 24
See also Great Financial Collapse of 2008
First Cash Financial (FCFS), 151
Flowserve (FLS), 58–59
flu pandemics
and back-door strategies, 22–23, 40
H1N1 virus, 20, 36–37, 41, 43–45, 45
H5N1 virus scenario, 27–34
and irrational fear, 20
and short selling, 16–17
vaccines, 39, 41, 42
Ford, 92
foreclosures, 151
France, 88
Freddie Mac, 139
front-door investing strategies
for alternative energy, 88
as apocalyptic investing principle, 23, 158
for asteroid strikes, 131–32
for energy efficiency, 91–92
for financial collapse, 150–53, 162
for global warming, 161
for oil crises, 78, 160
for pandemics, 39, 42–46, 159
for terrorism, 111–16, 161
for water shortages, 23, 56, 160
General Electric (GE)
and full-disclosure statement, xx
and Invision acquisition, 42
and terrorist attacks, 110
and water demand, 56, 157
GeoEye (GEOY), 115
geothermal power, 83
Germany, 86
Gilead Sciences (GILD), 40
GlaxoSmithKline (GLX)
as back-door investment, 22–23
as long-term investment, xxiii
medical research of, 156
and swine flu vaccine, 40–41
Glen Canyon Dam, 52
global warming, 79–93
and alternative energy, 82–83, 85–89
and apocalyptic investing principles, 161
back-door strategies for, 161
debate on, 79–80, 86
as economic event, xviii
and emissions, 80, 89–90, 92
and energy efficiency, 83–84, 90–93
fading the fear of, 84
front-door strategies for, 161
and greenhouse gases, 81–82
investment implications of, 84–93
and oil demand, 67–68, 82
and record heat of 2010, 155
science of, 80–82
strategies for managing, 82–84
and timing, 24
and water shortages, xix, 51
worry of public about, 85, 85–86
goals in investing, 14–15
Goldman Sachs, 140
Google, 104, 146
Google Earth, 115
Google Trends
on global warming, 85, 85
and tracking fear trends, 44–45, 45
Great Depression
as economic event, xvii
Great Depression (continued)
and fears for capitalism, 133
and Great Financial Collapse of 2008, 137
opportunities afforded by, 3
Great Financial Collapse of 2008
and apocalyptic investing, 10–11
cause of, 135–45
and derivative trading, 149
and fade-the-fear principle, 19–20
and global warming, 85–86
and oil demand, 67
and personal savings rate, 143–44, 144
and stimulus package, 143, 147, 148
as threat to capitalism, 133, 134–35
Great Recession of 2008–9, 6–7
greenhouse gases, 81–82
GridNet, 91
Gulf of Mexico oil spill
and difficulty of deepwater drilling, 65
explosion precipitating, 61–63
investment opportunities of, 16
and limited oil supply, 63
and policy on oil exploration, 68, 72
public reaction to, 90
and second rig explosion, 155
Harvard-Smithsonian Center for Astrophysics, 117–18
H5N1 virus scenario, 27–34
high-tension wires, 83–84
highway spending, 147, 149
history of financial crises, 3–7
Honda, 92
H1N1 virus
fear generated by, 36–37
and front-door strategies, 43–44
irrational responses to, 20
scope of problem, 36
and trend tracking, 44–45, 45
vaccine for, 41
Hong Kong, 35, 37–38, 38
Hoover Dam, 52–53
household water consumption, 49
housing. See real estate market
hybrid vehicles
and battery technology, 90, 92–93
and gas prices, 67
and oil conservation, 71, 83
hydropower, 49, 82
hyperinflation, 150
identity theft, 104
Idex Corp. (IEX), 59
index funds
and author’s investment approach, 8–9
CSFB Dedicated Shortsellers Index, 17
S&P Dividend Aristocrats index, 73, 74, 75, 75
and terrorist attacks, 108–9
See also Standard & Poor’s 500 index
India
and oil demand, 70
space program of, 127
and swine flu pandemic, 36–37
industry
and oil demand, 66, 68, 70
and water demand, 49, 54, 55
and weakening dollar, 143
inflation, 4, 138, 150
infrastructure, 153
energy infrastructure, 83–84, 148
highway infrastructure, 147, 149
and stimulus money, 146, 147, 148
water infrastructure, 23, 50, 51, 55–56
initial public offerings (IPOs) boom, 138
innovation, 146 Insituform (INSU), 59
Intel, 91
Intercontinental Exchange (ICE), 149
interest rates, 146, 147
international markets, 37–38, 38
International Monetary Fund (IMF), 6
Internet, 104–5, 114
investing principles (basic), 13–18
achieving diversification, 13–14
assessing management of companies, 15
avoiding short selling, 16–18
dealing with surprises, 16
setting investment goals, 14–15
Invision, 42, 110, 111–12
IPO boom, 138
Iran, 64
Iraq, 64
irrationality in markets, 7
Itron (ITRI), 91–92
Ivins, Bruce, 102
Jacobs Engineering (JEC), 56–57
Japan, 127
Jet Propulsion Laboratory, 118
J.P. Morgan, 106, 140
Kennedy, John F., 1–2
KISS investing approach, 8
Kowalski, Richard, 117, 119
Kuwait, 64
Lake Mead, 52–53
Lake Powell, 52
Las Vegas, 52–53
Lehman Brothers, 10, 105–6, 134,140–41
Lender Processing Services (LPS), 151
leverage buying, 109
Lindsay Corporation (LNN), 148
liquid filtration systems, 57
local consumption emphasis, 72
Lockheed-Martin (LMT), 110, 111, 130
London rail system attack, 108
L-1 Identity Solutions (ID), 115
long-term investing, xix
Magna International (MGA), 89–90
management of companies, 15
manufacturing, 54, 143
market asteroids, 129, 156, 157
mass transit, 71–72
MasTec, 148
McVeigh, Timothy, 97
media-driven fear and pessimism, 2,128–29,156
meteorites, 119. See also asteroids
methane capture technologies, 83
Mexico, 4
mid-cap stocks, 9
Middle East
oil in, 64, 69
turmoil in, 4, 72
Milken, Michael, 138
Minor Planet Center, 117–18
money market funds, 9, 14, 141
monitoring technologies, 112–13, 114
Monsanto, 59
Morgan Stanley, 140
mortgage-backed securities (MBS),136, 139–40
mortgage crisis, 138–39
Mueller Water Products (MWA), 59
Nalco (NLC), 56
NASA (National Aeronautics and Space Administration), 118
Nasdaq (NDAQ), 17, 149, 152, 152–53
natural gas, 71
near Earth objects (NEOs)
Asteroid 2008 TC3, 117–19
and media-driven fear, 128
potential for collisions with, 120,123–24
See also asteroids
Nevada, 52–53
New Delhi, 50
New York City, 98–99, 103
New York Stock Exchange (NYX), 2, 149
New Zealand, 155
NICE systems (NICE), 113
9/11 terrorist attacks
economic effects of, 6
fear generated by, 95–96
investment implications of, 107–8
perspective on, 97
and short selling, 17
1987 market crash, 4–5
Nixon, Richard, 4
Noble Corp. (NE), 78
North Korea, 99–100, 155
Northrop Grumman (NOC), 130–31
North Sea, 65
Novartis, 41
nuclear power, 82–83, 87–88
nuclear threat, 3, 98–101
Nucor Steel (NUE), 148
Obama, Barack, 68
offshore drilling, 63, 65, 72–73
oil and oil crises, 61–78
and alternative energy, 76, 82–83
and apocalyptic investing principles, 160
Arab oil embargo, 3–4
back-door strategies for, 56,76–77, 160
and climate change, 67–68, 82
consequences of, 72
demand for oil, 66, 69–70
and East Coast oil exploration, 68
extraction of oil, 65–66, 67
fading the fear of, 73–75, 74, 75
front-door strategies for, 78, 160
Gulf of Mexico oil spill, 16, 61–63,65, 68, 72, 90
history of oil exploration, 63–64
investment implications of, 72–78
offshore drilling, 63, 65, 72–73
oil shock of 1973, 68–69
peak oil, 16, 66, 67, 68–70
price of oil, 66–67, 68, 71–72
sources of oil, 64–65
and timing, 24
waste from oil, 89
Oklahoma City bombing, 97
OM Group (OMG), 90
opportunistic investing, 7–8
optimism, 2
options, xix
Orbital Sciences (ORB), 131
Orbit International (ORBT), 131
Organization of the Petroleum Exporting Countries (OPEC), 64, 68
OSI Systems (OSIS), 115
Otter Tail (OTTR), 77, 87
Pakistan, 99–100, 155
pandemics, 27–46
and apocalyptic investing principles, 22–23, 159
back-door strategies for, xxiii, 39–41, 159
as economic event, xviii
fading the fear of, 35–38, 159
fear generated by, xviii
front-door strategies for, 39,42–46, 159
H1N1 virus, 20, 36–37, 41, 43–45, 45
investment implications of, 34–46
perspective on, 156
predictions about, 35
scenario, 27–34
and timing, 24
Paulson, Hank, 135
pawnshops, 151
peak oil, 16, 66, 67, 68–70. See also oil and oil crises
Pennsylvanian oil seep, 63–64
pharmaceutical industry, 39–40
PharmAthene (PIP), 115
Philadelphia Suburban (PSC), 60
Pickens, T. Boone, 69, 71, 87
Pimentel, David, 53
pollution, 49, 71
population growth
and oil demand, 66, 70
and water demand, 54
pork industry, 20
Portfolio Recovery Associates (PRAA), 151
power grid and cyberterrorism, 106–7
price drops in stocks, 21, 129–30, 156
principles of apocalyptic investing, 18–25
applying, 24–25
back-door strategies for, 22–23,157–58
fading the fear, 19–21, 157
front-door strategies for, 23, 158
Prius hybrid car, 67, 83
progress, xxi
public works projects, 146
Rajneeshee cult, 102
Raytheon (RTN), 130
Reagan, Ronald, 138
real estate market
and bubble-bust cycle, 9–10, 145
demand for, 147
and Great Financial Collapse of 2008, 6–7, 138–40
and related software companies, 151
reforms, financial, 148–49
Relenza, 40
retirement investing, 15
Ridley, Matt, 92
risk, xxii–xxiii, 14, 15
Roche, 40
Russia
and meteorite of 1917, 119
nuclear program of, 82, 99,100–101
and record heat of 2010, 155
space program of, 127
safe havens, 14
St. Louis Federal Reserve, 144
S&P 500. See Standard & Poor’s 500 index
SanofiAventis, 41
SARS outbreak, 35–36
Saudi Arabia, 64
savings rate, personal, 143–44, 144
Securities and Exchange Commission (SEC), 148
September 11 terrorist attacks
economic effects of, 6
fear generated by, 95–96
investment implications of, 107–8
perspective on, 97
and short selling, 17
sewage, 50, 51
short selling, xx–xxi, xxiii, 16–18,152–53
small-cap stocks, 9
smart grid technology, 90–92
Smithfield Foods (SFD), 20
solar energy, 82, 86
South American debt crisis, 4
South Korea, 155
Southwest Water Company (SWWC), 60
Soviet Union, 3, 103
Spain, 86
speculative bets, 23, 42
Spindletop oil gusher, 64, 65
Spyders Exchange Traded Fund (SPY), 37
Standard & Poor’s 500 index
and Cuban Missile Crisis, 3
Dividend Aristocrats Index compared to, 73, 75, 75
and Spyders Exchange Traded Fund (SPY), 37
and terrorist attacks, 6, 108, 108
3% drops in, 21
Standard & Poor’s Dividend Aristocrats Index, 73, 74, 75, 75
stimulus money
expectations for, 143
and infrastructure projects, 146,147, 148
and investment opportunities, 147,148, 153
stocks
and apocalyptic investing principles, 157–58
and diversification, 13–14
and fading the fear, 21
opportunities in, 13–14, 37
and pandemics, 42
price drops in, 21, 129–30, 156
suggestions on, xx
subsidies, 86–87
suburbs and suburban lifestyle, 71–72, 137
surveillance and monitoring, 112–13, 114
swine flu (H1N1 virus)
fear generated by, 36–37
and front-door strategies, 43–44
irrational responses to, 20
scope of problem, 36
and trend tracking, 44–45, 45
vaccine for, 41
Tamiflu, 40
technologies, 25, 54–55
terrorism, 95–116
and apocalyptic investing principles, 161
back-door strategies for, 110, 161
bioterrorism, 101–3
cyberterrorism, 104–7
domestic terrorism, 97
fading the fear of, 108–9
fear generated by, xviii, 95–98
front-door strategies for, 111–16, 161
investment implications of, 107–16
9/11 attacks, 6, 17, 95–96, 97, 107–8
nuclear terrorism, 98–101
perspective on, 97–98
and short selling, 17
and timing, 24
Tesla (TSLA), 92
Texas, 64, 65
Thailand, 5
Third World nations, 47–48, 72
tidal power, 83
Times Square bomb scare, 111
timing of investments, 24
Toyota, 67, 83, 92
trade, foreign, 139, 143
Transocean (RIG)
and deepwater drilling policy, 72
explosion and oil spill, 61–63
as front-door investment, 78
investment opportunities in, 16
and limited oil supply, 63
travel and pandemics, 32, 34
Treasury bonds, 8
trends, tracking, 44–45
tsunamis, 122
two-income family model, 137, 138
Tyco (TYC), 17, 110
unemployment, 134, 147
United Nations, 48, 54
urban areas, 54
U.S. Department of Defense, 104
U.S. Department of Energy, 77, 87
U.S. Federal Aviation Administration, 104, 105
U.S. Federal Reserve creation of, 148
and cyberterrorism, 104,105–6
and housing demand, 138, 147
utilities, 60, 77
vaccines, 39, 41, 42
Venezuela, 64
venture capitalists, 145–46
VeriSign (VRSN), 114
Vical Inc. (VICL), 43–44, 44
video cameras, 112–13
VitaminWater, 60
VMware (VMW), 116
volatility of markets, 14
Wang Jianwei, 106–7
war, xxi, 3
Washington, D.C., 98–99
water demand and shortages, 47–60
and apocalyptic investing principles, 160
water demand and shortages (continued)
back-door strategies for, 56–57, 59,60, 160
fear generated by, xviii
front-door strategies for, 23, 56,160
and global warming, xix, 51
investment implications of, 54–60
perspective on, 156–57
and price of water, 59–60
scope of issues, 47–51
water cycle, 51–54
water infrastructure, 23, 50, 51,55–56
Websense (WBSN), 114
wells, water, 53
Wells Fargo, 142
wind power, 76–77, 82, 87
WorldCom, 17, 146
World Health Organization, 36
World War II
as economic event, xvii, 3
and Great Financial Collapse of 2008, 137
as threat to capitalism, 133
Zhongpin (HOGS), 20