NMA develops new health and safety initiative for US mines

The National Mining Association (NMA) has launched a new NMA initiative to foster continued improvement in US mine safety and health performance - SafetyShare.Org. This program, according to NMA President and CEO, Hal Quinn, “harnesses a broad array of tools, resources and practices that are directed at further improvements in the health and safety of [...]

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International Mining | March 4, 2010 | 7:20 pm

A Green Oasis in the Desert

Dubai has created islands shaped like palm fronds, the world’s tallest building and even indoor snow skiing in the desert. Neighboring Abu Dhabi is taking the spirit of innovation even higher by building the world’s first carbon-neutral, zero-waste metropolis. The eco-friendly city of Masdar is scheduled to be completed in 2016. When finished, the city will have a working capacity of 110,000 people—50,000 residents and 60,000 commuters. The idea is to create an incubator for renewable energy and sustainable technology—a “Silicon Valley for clean, green and alternative energy.” There will be no cars, buses or other transportation reliant on fossil fuels. Energy to power the 6-square-kilometer city will come from a mixture of solar panels, wind turbines and the largest hydrogen power station in the world. All together, these will amount to about 130 megawatts of power, about 20 percent less than a conventional city of the same size, according to a report in ENI’s Oil magazine. Abu Dhabi’s government has already contributed $22 billion to the project and it hopes to attract investment from foreign governments and multinational firms as well. Last August, Masdar signed a deal with German chemical company BASF to provide construction materials, and just this week the head of the Abu Dhabi Future Energy Co. announced plans for a “Korean Cluster” within Masdar that will be home to South Korean companies, universities and facilities. Building a fossil-fuel-free city in Abu Dhabi, the world’s fifth largest oil and gas producer, may seem counterintuitive, but it makes a lot of sense. Masdar is a key part of the emirate’s long-term strategy to diversify its economy – that’s the same path Dubai started down several decades ago when it became clear that its oil wasn’t going to last forever. None of U.S. Global Investors family of funds held any of the securities mentioned in this article as of December 31, 2009. #10-150

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Frank Holmes - U.S. Global Investors | March 2, 2010 | 10:00 pm

Changing as Markets Change

I had the chance to listen to a prominent MIT finance professor talk about how market participants make their decisions, and I came away thinking that his big-brain ideas validate the approach that we’ve been using for years. Andrew Lo, the MIT professor, has developed what he calls the “adaptive markets hypothesis” (AMH) as a more sophisticated framework than the long-standing “efficient markets hypothesis” (EMH). I won’t go into a lot of detail, but the EMH assumes that all market participants act rationally at all times, and that all available information is immediately reflected in market prices. In Lo’s AMH, market participants are not always perfectly rational, he says – they often make bad decisions. They learn from those bad decisions and, driven by competition, the survivors constantly innovate. Those who don’t adapt don’t last. At U.S. Global, we have long viewed markets as “complex adaptive systems”—they are made up of many moving parts that are interconnected across a global network, and they learn from experiences and change accordingly. In our case, we use a matrix of top-down macro models and bottom-up micro stock selection models to determine weighting in countries, sectors and individual securities. We believe government policies are a precursor to change, and as a result, we keep tabs on the fiscal and monetary policies of the G-7 and what we call the “E-7” -- the world’s developing nations by population. We also focus on historical and socioeconomic cycles, and we apply both statistical and fundamental models to identify companies with superior growth and value metrics. We overlay these explicit knowledge models with the tacit knowledge obtained by domestic and global travel for first-hand observation of local and geopolitical conditions, as well as specific companies and projects. During his San Antonio visit, Lo contrasted “fear and greed” with “rational thinking” – the former being reactive and emotional, while the latter is measured and opportunistic. We use oscillators, like the one above showing gold and the dollar, to help us determine when fear or greed may be taking hold in a market. I’m a big believer in globalization, urbanization and major technological breakthroughs as key drivers of change in the world. These factors have an enormous impact on infrastructure creation around the world, which in turn greatly affects commodities demand. Back in the early 1970s, when gold resumed free-trading status in the U.S., China and India were both inward-looking and had very small economic footprints – now their economic engines are lifting tens of millions of people into middle-class prosperity each year. “I'd be a bum on the street with a tin cup if the markets were always efficient,” Warren Buffett once said. In other words, opportunities come to those (like us) who are able to navigate increasingly complex markets.   Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is also known as historical volatility.

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Frank Holmes - U.S. Global Investors | February 28, 2010 | 10:00 pm