Bill Gates: Growing Enough Food to Feed the World

How can we feed a growing population in the midst of climate change and an appetite for more meat? These factors and more are straining the world’s agricultural capacity and pushing up the cost of food, which makes it difficult for the world’s poorest people to grow enough to feed their families.

If you’ve ever gone on a fast, you know that by the end of the first day, about the only thing you can think about is food. That’s what it’s like pretty much every day for a billion people—15 percent of the world’s population—who are living in extreme poverty.

Forty years ago, things were even worse. Four in 10 people were living in extreme poverty and the global population was growing, prompting a prominent Stanford scientist, Paul Ehrlich, to predict that hundreds of millions would starve no matter what the world did to try to save them.

Fortunately, Ehrlich was wrong. About the same time, a brilliant scientist named Norman Borlaug was developing new seed and production technologies that enabled farmers, most importantly in poor countries, to dramatically improve their yields. Known as the father of the Green Revolution, Borlaug is credited with saving millions of lives and helping many nations advance from the depths of poverty.

But the world’s success in warding off famine led to complacency and a decrease in agricultural aid. Today, experts are again warning that there may not be enough food to feed everyone. Studies show a rise in global temperatures, more droughts, and more floods—all due to climate change—could wreak havoc with crop yields. The global population is predicted to grow by as much as 40 percent over the next four decades, and more people are eating meat. All of these factors, and more, are driving up food prices.

Yet, I believe that this is a solvable problem. In my annual letter that will come out next week, I talk about the need to find solutions so farmers—especially those in the poorest countries—have better tools and knowledge so they can grow enough food to feed their families. Investing in innovation and partnerships will help build self-sufficiency. This will not require a huge investment, but it will take more money than is available today. In a world as wealthy as ours, it is a small price to pay to save millions from needless suffering. And ultimately contributes to the stability and well-being of the entire globe.

Days of Easy Money Are Over for Fund Managers - By Alice Schroeder

Found via the Corner of Berkshire & Fairfax.

As a profit-making endeavor, managing other people’s money is hard to beat. The business requires very little invested capital. There are no worries about getting paid in full when the bill comes due, since fund managers control their customers’ money. And lackluster performance is no bar to hefty profits because fees, based on the dollar value of assets under management, are paid even when returns are abysmal.

Wall Street, it often seems, is exempt from the laws of economics. Most active money managers produce worse returns than an index, such as the Standard & Poor’s 500. But making enough money to look respectable to clients has been relatively easy as long as falling interest rates boosted the value of most asset classes.

What’s more, new competitors constantly enter the business, yet rarely discount fees to gain market share. Instead, funds rely on investors to chase the latest high- performing manager, like gamblers who ignore their losses while seeking a hot slot machine. This has given the business a pricing umbrella that shelters it from competition.

From the owners’ standpoint, all this has been fabulous. They work in a business that produces abnormally high profits and forgives incompetence, a rarity in modern capitalism.

What is the best fitness regimen for a tiger? The case for authentic human movement.

What is the best fitness regimen for a tiger (or a tigress)?

Does the question make you smile? Does it sound irrelevant or stupid? And, most importantly, what’s the answer? How would you train a wild tiger so it can be fit? Would you train it by doing weight lifting and cardio training on the side? Could you imagine a tiger running on a treadmill while checking its pulse rate, without cracking up? Or could it be that it doesn’t need to exercise at all, being genetically, i.e. naturally fit?

Here’s the right answer: in order to become and stay optimally fit, a tiger needs to move the way tigers move in their natural biome. It is that simple. Tigers will move naturally when they’re free to live the natural life every tiger should live; as will all other wild animals.

Throughout their entire life and without discontinuity, wild animals will move the way nature and evolution intends them to, simply because in nature, moving naturally and staying fit is essentially a matter of survival. If you can’t move, you’re inexorably condemned to an imminent death. Every newborn animal will start developing his or her species-specific movement aptitudes very early for this very reason.

The young “human animal” possesses the exact same drive to move. He wants to move naturally all the time, even in artificial, man-made environments. Call them “hyperactive” or “ADD” as much as you want, but kids know what’s important and priority, and moving is important and priority to them. It is a “built-in” program, a fundamental part of their genetic agenda, just like in any other young animal. Can you expect children to become healthy and fit if you deprive them of their evolutionary birthright to natural motion? Should you wait until they are in their teenage years to expose them to “real” fitness and give them video games to play in the meantime? Lastly, why should such an evolutionarily natural movement activity be reserved to and practiced by only children?

..................

Related books:

The Primal Blueprint

The New Evolution Diet

Larry Fink on CNBC in June of 2008

I wanted to find a more recent example (Bernanke and the Fed was too easy....and already well documented) of the danger in listening to "experts" in relation to the Phelps excerpt in the previous post.

A quote from the video below: "We were one of the investors in the Lehman equity offering...Lehman is not a Bear Stearns situation...Lehman is adequately structured in terms of avoiding a liquidity crisis...We believe we're closer to the bottom than another round of calamity."

Link

Thomas W. Phelps on opinions

Excerpt from the book 100 to 1 in the stock market:

"Opinions carry little weight with the experienced investor. "Often in error, never in doubt" should be carved on the tombstone of many an investment advisor. But the reasons for an expert's opinion may be worth much more than their weight in gold. And when we say his reasons, we mean his assumptions and why he makes them.

I was disillusioned by experts as to the value of opinions per se. In the fall of 1929, when the Dow-Jones Industrial Average plunged from a high of 381 to a low of just under 200, the head of what was then the world's largest bank told us the stock market had undergone a healthy correction and the country was ready to move onward and upward to new heights of prosperity. The market rallied into the spring of 1930, then plunged to the depression low of 1932. It was seventeen years before the Dow-Jones Industrial Average got as high as 200 again.

In this same period we got the word from the floor of the New York Stock Exchange that a Morgan broker was bidding 190 for thousands of shares of U.S. Steel. U.S. Steel was a Morgan creation. No one knew more about it than the house at 23 Wall. But by 1932 the stock sold at a low of 21-1/4.

One day from 26 Broadway, the headquarters of Standard Oil, came the word that the founder, John D. Rockefeller, and his son, John D. Rockefeller, Jr., were meeting the press. "My son and I," the elder Rockefeller announced, "are bidding 50 for one million shares of Standard Oil of New Jersey." No one could be better informed about the oil business in general or Standard Oil of New Jersey in particular than its founder and principal shareholder. Yet after a brief rally Standard Oil of New Jersey stock sold down to 20.

The point is not that any of the men involved were willfully misleading the public. I believe they were all sincere. But those three experiences taught me this:

1. Never mind opinions. They are not worth a dime a dozen. Try to get the reasons for them, the assumptions underlying them.
2. No one knows or ever can know for sure what the future holds. If the Almighty had intended us to know that, He would have equipped us with another sense which none of us has. The Irishman highlighted the matter when he said, "Sure and I wish I knew where I was going to die. I'd never go near that place." If we have no certainty as to when or where our own life will end, how can we presume to be sure of future developments with regard to matters not nearly so close to us?

Is this a counsel of despair? Not a bit of it. It is simply a recognition that in investing we deal always with probabilities and possibilities, never with certainties. It follows as night the day that in investing the odds are all important."

FRONTLINE: Nuclear Aftershocks

Found via The Big Picture.

FRONTLINE correspondent Miles O'Brien travels to three continents to explore the revived debate about the safety of nuclear power, the options for alternative energy sources, and questions about whether a disaster like the one at Fukushima could happen in the United States.

Watch Nuclear Aftershocks on PBS. See more from FRONTLINE.

TED Talk - Clay Shirky: Defend our freedom to share (or why SOPA is a bad idea)

Link

THE 60-YEAR JOB: FREEMAN DYSON

Found via Paul Kedrosky.

The distinguished quantum physicist, who worked with Einstein at Princeton, tells Charles Nevin three things he's learnt ...

Thank you very much for your friendly invitation. I am delighted to share with Her Majesty the distinction of hanging on longer than expected. Here are brief answers to your questions.

1. I continue working because I agree with Sigmund Freud’s definition of mental health. To be healthy means to love and to work. Both activities are good for the soul, and one of them also helps to pay for the groceries.

2. In my younger days my work as a scientist was deep and narrow. Now, as I grow old, my work grows broader and shallower. As a young man, I solved technical problems of interest only to a few specialists. As an old man, I write books about human affairs of interest to a broad public. In both halves of my life, I tried to make the best use of my limited abilities.

3. (a). Advice to people at the beginning of their careers: do not imagine that you have to know everything before you can do anything. My own best work was done when I was most ignorant. Grab every opportunity to take responsibility and do things for which you are unqualified.

(b). Advice to people at the middle of their careers: do not be afraid to switch careers and try something new. As my friend the physicist Leo Szilard said (number nine in his list of ten commandments): “Do your work for six years; but in the seventh, go into solitude or among strangers, so that the memory of your friends does not hinder you from being what you have become.”

……………….

Related previous posts:

The Civil Heretic

HERETICAL THOUGHTS ABOUT SCIENCE AND SOCIETY - By Freeman Dyson

Freeman Dyson on Charlie Rose

Freeman Dyson on EconTalk

TED Talk (2003) - Freeman Dyson says: let's look for life in the outer solar system

Robert Wright interviews Freeman Dyson

Greenlight Capital Q4 2011 Letter

Found via Zero Hedge.

Link to: Greenlight Capital Q4 2011 Letter

Charlemagne Capital Limited: A way to play emerging markets?

In the latest 7-Year Asset Class Return Forecast that gets produced every month by GMO, the highest forecasted asset class over the next 7 years is emerging market stocks (6.8% per year). One could try and capture some of this tailwind by buying indices of emerging markets, buying individual stocks, investing with a manager that focusing on emerging markets, or investing in a manager that focuses on those markets. Charlemagne Capital Limited may fit that latter category.

Through its subsidiaries, Charlemagne focuses on managing mutual funds, hedge funds, and specialist funds. The group invests in the public equity, and alternative markets across the globe with a focus on emerging markets, including Asia, Eastern Europe, and Latin America. It describes its investment process as seeking “to profit from inefficiencies in emerging markets to generate returns for clients across its product range using a rigorous, bottom-up stockpicking process combined with disciplined risk management and portfolio construction.” The company’s main listing is on the AIM under the symbol CCAP, but it also trades on the Pink Sheets under the symbol CNLMF.

To use an idea from Nassim Taleb, Charlemagne (and most money management businesses in general) operates in Extremistan, by which I’m referring to the observation that its results are much more subject to randomness than many other businesses. This can be shown by looking at a table of their results over the last several years:

The last trade on the Pink Sheets ($0.16) puts the market cap of the company at about $44.3 million. Yesterday's close on the AIM (£0.13), where the stock is more liquid, would value the company at about $52.5 million. Charlemagne has no debt and ended 2011 with about $25 million in cash. The company has shown a continued effort to return capital to shareholders by paying out earnings in the form of dividends (since they are comfortable with the current position of the balance sheet) and occasionally repurchasing shares.

As one can see from the table above, total assets under management declined quite sharply over the past year. This was due both to client redemptions and performance as, unlike the major U.S. Markets, many of the emerging markets suffered significant declines last year, of which Charlemagne’s holdings were not spared. The OCCO hedge fund managed by the company did produce a positive performance in 2011 though. Of Charlemagne’s 5 categories of assets that it manages, OCCO produced the sole increase to its AuM total for the year by ending 2011 with $444 million under management (up 44.2% vs. 2010).

So is Charlemagne worth investing in? At its current market cap, the company is trading at about 2x tangible book value and about 10x what they should earn in 2011. It is a great, high return on capital business, but it is also very unpredictable. The company has an experienced management team that owns a decent number of shares and should continue to pay out earnings in the form of dividends. There’s certainly the risk that a slower growing Europe and/or China could slow these markets and businesses down further, but should they recover and Charlemagne capitalize on the recovery, the current market cap is standing at about 1 or 2 times what the company was earning at its peak. All in all, there are things to like and I think there is a lot of upside, but I don’t think it is one of those stocks you want to want to buy and not look at for the next five years. So if has a place in a portfolio, it is probably as a smaller-than-normal position.

Disclosure: Neither I nor any investment product I co-manage at Chanticleer have an investment the stock(s) mentioned in this article at the time of posting. This is not a recommendation to buy or sell a security. Please do your own research before making an investment decision.