Investment Trends: Things I look for

I am a big history bluff. My favourite show right now is HBO's Rome (ok, its not very historically accurate). The one thing that history teaches us is that big events sometimes begin with a series of really small incidents that go under the radar. For example, the Tienanmen Square protests of 1989 was sparked by the death of reformist bureaucrat.

How does this relate to investing? Little things tend to become investing trends. For example, I first heard of the peak oil theory when the price of oil was about $30/barrel and people were quietly buying up land in Alberta and junior oil stocks.

So, while the media coverage is focused on the downturn in the U.S. housing market and the subprime mortgage industry, I keep noticing a common story popping up buried as small stories in the back pages. People are buying up a lot of infrastructure:

1. Remember last summer when a Dubai company attempted to buy U.S. ports (ultimately they dropped the bid because of political pressure)? Dubai has one thing- a lot of money.
   
   
2. On February 22, 2007, the Infrastructure group of Morgan Stanley announced that they were purchasing 80% interest in the Port of Montreal- the 3rd largest container port in North America. Morgan Stanley- over $400 billion in assets.
   
   
3. On Monday (while everyone's attention in Canada was on the latest budget), Deutsche buy announced it had bought container ports in New York and New Jersey. Deutsche bank has $1.1 billion Euros under management.

According to GE's latest annual report, infrastructure spending will reach $15 trillion world wide by 2015- mostly driven by international trade.

So maybe we have found the new thing to buy now that the commodities market has peaked?!? Maybe the latest investing trend has already started to take hold but the media hasn't grabbed onto it yet?

Time will tell but I tend not to bet against Dubai money, Morgan Stanley and Deutsche Bank.

The discipline of investing

I have the privilege of being friends with traders for large financial institutions. This allows me to get some top-notch reserach from them and to paratake into their insights into investing.

The day after the world markets dropped based on fears of an economic slowdown, one of my trader friends made an interesting obvservation to me. He believes 70% to 80% of his clients would realize greater investment gains if only they had the discipline to stick to their plan. They didn't pick bad stocks and/or bonds. They just didn't stick to their plan.

It reminds of something I once heard- success in life depends on hard work, discipline and a little good luck. I suspect the same applies to investing in the stock market- do a lot of research (hard work), stick with the plan (discipline) and hope for good times (good luck).

Having been told this by my friend, I am thinking of ditching a lot of stock market research I read and refining a plan I can stick to. I'll keep you posted.