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“I find more and more that it is well to be on the side of the minority, since it is always the more intelligent”……. Johann Wolfgang von Goethe 1749-1832

You may have noticed these ramblings of mine are usually sent out in the middle of each month.  Then Steve sends out his at each month end.  But last month I wrote February’s letter much earlier than usual in response to the widespread media hysteria as the beginning of February welcomed what was described by jubilant pessimists as “an unexpected stockmarket crash.”

To demonstrate the extremes Februarys can provide, I mentioned the awful February snowfalls of 1963 and 1947.  Clairvoyant or what?  Before you could say Michael Fish, along came “The Beast from the East” the “worst winter in 100 years” according to the Daily Depress, the Daily Fail, and confirmed by the “Breaking Spirits” rolling banner on Bad Noise at the Beeb.

Thanks to widespread predictions of unprecedented chaos, millions became addicted overnight to bread and milk, struggling through blizzards to empty supermarket shelves.  Fights broke out amongst 4x4 drivers over the few spaces left in our local Tesco snow park.  Inside I was lapped three times in the dairy section.  In Edinburgh once snowdrifts exceeded two inches all public transport was cancelled, and it was so cold that lawyers had their hands in their own pockets for a change.

No doubt you noticed “the worst storm in living memory” blew by in around three days unlike the weeks of freezing misery us Baby Boomers suffered in 1963, not to mention ’82 and 2010/11.  This time round, only days later temperatures were back into double figures and milk supplies returned to normal.  My Auntie Irene said she was only sixteen during the horrendous blizzards of February 1947 and for weeks walked the three and a half miles to her work and back.  Brrrr.

As to the 1960s, while there were few News broadcasts, media and “experts” were as obsessed with weather as they are today.  Only difference was their obsession then was an “Oncoming Ice Age”- global cooling in other words.  It was front page news in magazines including “Time” and “National Geographic” as well as broadsheets, if you’re old enough to remember them.  According to the “man-made” cooling theories of the time billions of us should be dead by now, starved to death by crop failures (and a lack of semi-skimmed milk no doubt).

“Extreme weather warnings” are as common as “stock market crash” predictions over the years.  Hard to believe, but in 1970 a “leading” Californian ecology professor predicted the world as 11C colder by 2000.  That’s twice the rate it needs to engineer an Ice Age.  A year later arch-pessimist Paul Ehrlich said the UK would be “a small group of impoverished islands” by 2000.  BRRRREXIT?  Then suddenly “experts” changed their climate tune.  They’d meant global warming all along.

And thus so it passed that in 1986 the head of NASA’s Goddard Institute predicted a “greenhouse effect” would raise sea level so much that the West Side in New York would be under water by 2000.  Princeton Professor Michael Oppenheimer cheerily predicted that by 1995 “swathes of North America and Eurasia would be desolate wastelands with crop failures and food riots.”

Closer to home in March 2000 “experts” including scientists from the University of East Anglia, which by then should have been under water, were widely quoted predicting the end of snow in the UK.  “Snowfalls are a thing of the past.”  “Children aren’t going to know what snow is.”  They said.  Oops.

Here’s some quotes which do suggest that “climate change” is kosher though …… “Snows are less frequentand less deep. I remember when I was a small boy, say 60 years ago, snows were frequent and deep every winter”………. Thomas Jefferson 1799.

“Every season is extraordinary it seems, almost every month being one of the driest or wettest, or windiest, coldest or hottest ever known”…….. Brisbane Courier 1871.  Nothing new then.

The more you read and research with an open mind and a good memory, the more suspicious you become that this climate change malarkey is as wrong as it was from the early 1960s to the sudden about-turn in 1984.  Hard to believe, but before then 86% of “expert scientists” believed the planet was on a cooling path.  And referred to the same extreme weather phenomena as today as proof.

How can it be that 400 parts per million Carbon Dioxide in the atmosphere will turn the Earth into a uninhabitable hothouse, when it’s been shown that previous ice ages occurred with CO2 levels ranging from 250 to 7000 parts per million?  Why don’t we accept that cycles are natural?  Night follows day, tide goes out and back in again, and there are four seasons, Spring, Summer, Autumn and Winter.  Except Scotland where we have two… Winter and next Winter.

And ask yourself this - what happened to the hole in the Ozone layer?  And if the ice caps are melting fast why have the Russians just built the three largest most powerful icebreakers in the world, capable of breaking through icefields over three metres thick?  Seen that reported anywhere?

So what’s this got to do with investment Alan I hear you say?  Well our way of doing things at ASAM is to constantly challenge consensus thinking.  Unfortunately there’s been a dramatic fall over the last 10/20 years in balanced investment reporting.  The internet hasn’t helped.  We live now in an “Information Overload /Knowledge Deficient” world.  And those “experts” like Albert Edwards with his annual error strewn gloomy predictions catch the headlines.  Bad news sells, sadly.

So I ask you to re-read the opening quote.  Contrarian US investor Humphrey B Neill in 1954 wrote in his book “The Art of Contrary Thinking.”

“Contrary thinking is a way of thinking.  It is more of an antidote to forecasting….it’s a thinking tool, not a crystal ball.  It forces one to think through a given subject.  As it has been said:  If you don’t think things through, you’re through thinking”

Nine years ago this month it was applying contrary thinking that led us to believe a new bull market for world stock markets was imminent.  And we said so publicly.  Didn’t go down well with the consensus.  But nine years later and it’s still going strong despite rumours to the contrary.  But we’re not complacent.  You can be assured we’re watching the runes very carefully.  As are others like much maligned Neil Woodford.  He’s been running value funds for over 30 years.  He may be out in the cold right now.  But it won’t be long until he’s on a hot streak.  It’s called cycles.

alan-steel
Author
Alan Steel
Chairman
This letter is the personal view of Alan Steel. Please check the appropriateness to your individual position with your advisor before taking or refraining from any action.

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