The Futurist

The Futurist's Stock Portfolio for 2007

I am going to present an investment portfolio to be tracked over the remaining 11 months and 7 days of 2007 (I should have done this on Jan 1, but the idea of doing a post didn't arrive at a convenient time).  The hypothetical portfolio of $100,000 will be invested in exchange-traded securities and mutual funds that reflect what I believe to be an optimal portfolio construction for 2007.  We will, at the end of the period, see how the portfolio tracks the broader market.  Dividends will be re-invested. 

So the portfolio is :

 

Near misses (securities I did not add, but strongly considered) : FXI, GGP, PXN

The selections represent general principles and specific predictions outlined in the previously written articles :

The Next Big Thing in Entertainment, Part I, Part 2, and especially Part 3

The Culture of Success and Stock Market Capitalization in Developing Countries

The Stock Market is Exponentially Accelerating too

The World Wealth Report 2005

I herely sign and seal this portfolio on January 23, 2007, bought at the prices today, to be examined on December 31, 2007, in relation to broader market indices.

Let's see how it turns out. 

Ethanol Prices May Tumble Through Termite Digestion Discovery

When most people think of termites, the reaction is predictably negative.  After all, not only do they damage homes and bore holes through books, but they have a certain ugliness that even ants do not possess.  However, this is another one of those times where a particularly formidable and vexing problem of civilizational significance meets a countering force from just about the last source anyone would expect.  The loathed termite might actually attone for all the cumulative economic damage it has caused to human society over the centuries. 

Both MIT Technology Review and BusinessWeek have, in the last 30 days, featured articles detailing how a termite's ability to digest wood is due to certain microbes in the digestive tract, which contain a gene that can be extracted and harnessed into processes to create cellulostic ethanol out of agricultural waste for a fraction of the current cost. 

America's forests, agricultural waste, and 40 to 60 million acres of prairie grass could supply 100 billion gallons or more of fuel per year—while slashing greenhouse gas emissions. That would replace more than half the 150 billion gallons of gasoline now used annually, greatly reducing oil imports. It "will happen much faster than most people think," predicts Michigan State biochemical engineer Bruce E. Dale. "And it will be enormous, remaking our national energy policy and transforming agriculture."

Recent work has lowered the cost of this step thirtyfold, to about 50 cents per gallon of ethanol produced. "We now are not far away from the goal of 10 cents per gallon," says Glenn E. Nedwin, chief scientific officer at Dyadic.

Always remember that 1.5 units of ethanol are required to produce the same energy as 1 unit of gasoline.  So far, US ethanol production has amounted to merely 7 billion gallons (enough to replace just 3% of gasoline consumption) in 2006, is barely cost-competitive with gasoline even with the agricultural subsidies the federal government has provided, and is heavily dependent on using corn which is also needed in the food industry.  But if the termite enzyme can create a process that scales up to the extent of producing 100 billion gallons a year for under $1 per gallon (already a more modest goal than what the scientists in the article are striving for) out of otherwise unused biomass, we just might tackle oil dependence, greenhouse gas emissions, and the trade deficit simultaneously. 

The progress they make between now and 2010 will enable us to determine if this is on track to becoming a technological reality by 2015. 

Update : There may also be a way to create Ethanol from trash. 

Update : Algae may also be a large source of liquid biofuels that can compete with Ethanol. 

Related :

Why $70/barrel Oil is Good for America

$70+/barrel Oil, the Non-Crisis

The State of the Jihad

The Fourth Rail has a superb roundup of each of the dozen or so fronts that the global War on Terror is being waged.  I would argue that Lebanon and Britain/France should also be included.  Nonetheless, if you read just one article on this issue in one year, this should be that article.  Nowhere else has the global nature of the conflict been so efficiently encapsulated.

It is frightening that a person in the position that Nancy Pelosi is in actually believes that the War on Terror exists only in Afghanistan and nowhere else, as she said on 60 minutes. 

Overall, it appears that jihadists are losing ground in slightly more theatres than they are winning ground in.  This is a reason for cautious optimism. 

Plus, another good article is here : 

When the Bush administration came into office, only Egypt and Jordan were functioning allies of the U.S. Iran and Iraq were already declared enemies, Syria was hostile, and even its supposed friends in the Arabian peninsula were so disinclined to help that none did anything to oppose al Qaeda. Some actively helped it, while others knowingly allowed private funds to reach the terrorists whose declared aim was to kill Americans.

The Iraq war has indeed brought into existence a New Middle East, in which Arab Sunnis can no longer gleefully disregard American interests because they need help against the looming threat of Shiite supremacy, while in Iraq at the core of the Arab world, the Shia are allied with the U.S. What past imperial statesmen strove to achieve with much cunning and cynicism, the Bush administration has brought about accidentally. But the result is exactly the same.

Imagine that.

Related : VietNam or Korea, which was better in the long run?

New Astronomy Images, and Evidence of Telescopic Advances

I happened to come across this post, which displays the author's selections of the top astronomical photographs of 2006.  The one I am particularly stunned by is #5, the transit of the Space Shuttle and International Space Station in front of the Sun.  The precise timing needed to execute this image mind boggling, and probably less than one in a million.  The photographer, Thierry Legault, had to 1) know when the shuttle was approaching the ISS, 2) know when both of them would be in front of the sun relative to his location in France, which was a zone of observation only 7.4km wide, and 3) get this image in the 0.6 seconds of the transit duration.

Not all of these ten photographs are exclusively the result of instruments and technologies that did not exist a few years ago, but 3 to 4 of them are.  As we have discussed before, telescopic power is also an accelerating technology, and increasingly impressive images will continue to emerge as new telescopes and supporting resources become operational. 

Little can match an astronomical discovery's ability to generate wonder, optimism, and just a general good mood.  We shall see, within just the next couple decades, images that even the late Carl Sagan would have been in awe of.