I live and breathe Wall Street. I don't mean that metaphorically, like, "Oh, I love stocks so much I live and breathe Wall Street." No, not at all. I actually live on Wall Street. When I look out my window I see the New York Stock Exchange. And I trade all day. I write articles and books in between trades. And in between writing I try to do various deals. And when I walk outside I'm within feet of guys in machine guns, traders talking on their cell phones, tourists snapping pictures, and the huge US flag that adorns the front of the Exchange.
And I worry. Very wealthy people don't like to worry. They like to focus on the intrigue of their love lives, or they like to play with their new and plentiful toys. So they outsource their worry to me. "James," one of my investors said to me, "I made the money. Now you protect it." We live in a world of nightmares. Every day those nightmares attempt to come to the surface of our reality and stir up some trouble. But understanding these worries, the myriad ways the world could end, and hedging against them (or betting against them) is the way to turn the fear into greed, the nightmare into a dream.
Help me out here. I'm going to list some of the ways the world could end. At least the ways the world could end that people are actually worried about. If you can think of any more, please put them in the comments. Over the next few weeks/months/years I'm going to dissect in this blog the realities of these worries and see how we can make some money because of them.
Some Ways the World Could Be Destroyed
1. Pandemic. We're all mini-experts on Swine Flu now. And here's what we know about flu pandemics: The second wave is much deadlier than the first. And guess what: the second wave is about to start any second.
2. Terrorism on US soil. The other day a coffee cart vendor who used to work on Wall Street got arrested for planning bomb attacks at various locations in NYC. This is really unpleasant for me since I love getting coffee and a donut at the carts. I spoke to a terrorism specialist who works for the government in an undisclosed location (I begged her to tell me where but she refused). She said, "Eventually its going to happen."
3. Financial collapse. In October, 2008 we came really close. Some Nobel Prize winners think that was nothing compared to what's about to hit.
4. The world is running out of oil. The US "peaked" in 1970. Saudi Arabia probably peaked in 2005. What happens when oil hits $20 a gallon?
5. Methane gas is the worst greenhouse gas. What happens when the gas sitting under the continental shelf starts to get released into the atmosphere, causing temperatures to shoot up 10 degrees. Nobody talks about this particular gas because the solutions are much harder to develop.
6. We run out of clean water. Right now over 50% of hospital beds worldwide are filled with people sick from dirty water-related illnesses. The supply of water never changes, but the population is urban areas is going to double and triple in the next few decades. Major metropolitan areas will simply have no clean water.
7. Nuclear terrorism. Its not that hard to make a dirty bomb. I'll show you how in this blog. Its not even hard to make a nuclear bomb. I'll show you that here as well. Stay tuned.
8. Major hurricanes. What happens when a Category 5 hurricane hits New York City? Don't laugh. We might be overdue.
9. Nuclear terrorism, part II (because I can't get enough of it). Warren Buffett once told me (well, he was on CNBC and told many people), "Over the next 100 years there is a virtual certainty of a nuclear warhead exploding on a populated area." How will it happen? What will be the result on the world? On you?
10. Volcano. The largest volcano in the world is at Yellowstone National park. If that erupted it would probably wipe out most of the continent. And its about 30,000 years overdue. Can we detect it and stop it?
11. Nanotechnology gone awry. This isn't science fiction anymore. I don't want someone saying "mistakes were made" when the entire planet is enveloped by gray nano-goo. Who are the players and what are they doing to protect us?
12. The human race is going extinct? Why are all the kids getting peanut allergies? When I was a kid nobody ever dropped dead from eating a peanut. The human race is losing its ability to fight off auto-immune diseases.
Lets start with this list. I have more and I want to hear from other people. Over the next few posts I'll start exploring the realities of the above. Maybe there's a little bit of fear here, but trust me there's also some greed. If the world doesn't end then I think there's some money to be made.