My Electrician Drives a Porsche?

Investing in the Rise of the New Spending Class

Gianni Kovacevic

• Publisher: Greenleaf Book Group Press
• Year: 2016
• Print ISBN: 9781626342514
• eBook ISBN: 9781626342712
• Topic: Personal Development
• Subtopic: Personal Finance

How One House Call Can Change Your Life

A weekend service call changes the life of Doc Anderson forever. Johnny, the surprisingly wealthy energy whiz-kid, introduces Doc to a compelling new investment theme—following the rise of a new spending class. As they set course on a fact-filled adventure, Doc's eyes are opened to the impact that billions of new consumers will have on our environment and how their increased participation in our fast-changing world will figure into the economy of the future. Through this journey, he too becomes a hyper-aware participant in the boundless opportunities for responsible wealth creation with his newfound knowledge base in what makes realistic environmentalism possible.

Through skilled storytelling and finely illustrated analysis, Gianni Kovacevic will inspire readers to become enlightened participants in the global shifts that will be changing our world for decades to come.

9

Lunch with the realistic environmentalist

“If I hadn’t been reading that newsletter you recommended, I would have failed that quiz across the board,” I said to Johnny as we walked out of the presentation hall.

“You get the point, then?”

“Gold in ounces, copper in pounds, oil by the barrel, wheat in a bushel, and cattle by the head.”

“And more importantly, you stay current on the prices so, like in a soap opera, you can follow the daily, monthly, and yearly swings and you know how much all that stuff actually costs.”

As we filed onto the showroom floor, Johnny guided me toward the exit door, away from the maze of investment opportunities exhibits.

“Where are we going?” I asked.

“To meet a friend, someone who I think can really explain the relevance of where all this stuff comes from.”

The hotel lobby was as busy as the conference itself, and hidden away in the bustle of it all was none other than our billionaire mining tycoon chatting away with someone. Johnny motioned me to follow and made a beeline for him. What was Johnny doing? Can we just go up to this guy and ask him questions?

I stopped wondering as we closed in and I realized who the tycoon was talking to—it was the striking Indian woman I’d seen earlier. There seemed to be an easy rapport between them as they both smiled and laughed but still maintained a presence that set them apart from the rest of the crowd.

To my surprise, the tycoon’s face lit up as soon as he saw Johnny, as he reached out and clasped the younger man by the shoulder.

“It’s been a while, Sparky.”

“A year to the minute.”

I was dumbfounded at the way in which Johnny was so cordially greeted by this man who had just received a standing ovation from a roomful of sophisticated investors. Even more impressive was that it seemed quite clear that the meeting we were about to have had been planned well in advance. The tycoon turned to the Indian woman, motioning to Johnny.

“Noorita, this is Johnny, an old friend. I call him ‘Sparky.’ He’s almost as tenacious as you.”

“Charmed,” Noorita smiled, tilting her head slightly.

“Ms. Nair is in from Mumbai,” the tycoon explained. “She’s big in tech and communications.”

“Great to meet you,” Johnny replied warmly, bowing his head slightly.

“Who’s your friend, another convert?” the tycoon asked, extending his hand for a firm handshake.

“Doc Anderson, my family doctor. He’s taken it upon himself to broaden his horizons about the world we live in.”

“Your speech certainly helped,” I gushed as I shook his hand. “Ms. Nair, a pleasure to meet you.”

I copied Johnny’s head bow, unsure if it was the proper custom or if he possibly was faking it.

“Likewise, I’m sure, Doctor Anderson.”

As she did for Johnny, she tilted her head and smiled again, though I was unsure if, this time, it was tinged with amusement at my gesture.

“Welcome aboard, Doc,” the tycoon offered. “Were you able to pass my quiz at the end?”

“The answers were easy now that I follow these kinds of things, but as Sparky here would tell you, I’m still working on the broader puzzle,” I said.

“No need to bend your brain too much, Doc. It’s dead simple,” the tycoon assured me. “People at large are rather oblivious to what’s going on around them. They listen to the noise but they can’t hear the music.”

“Johnny’s been playing me a song or two,” I nodded. “He’s been changing how I look even at little things like the Big Mac.”

“Ah, purchasing power,” the Mumbai magnate interjected. “Do you mean the Economist index?”

I must have looked bewildered, as Johnny quickly jumped in to my rescue.

“More in general,” he answered. “I’ve been discussing inflation affecting purchasing power with Doc. We haven’t really gotten that deep into parity across countries yet.”

“It’s a fascinating example,” the Indian woman smiled. “McDonald’s entering India has been linked to tripling the number of times Indians eat out. And with a vegetarian running a beef burger company in a country where the majority don’t eat beef!”

“Wait,” I said. “A vegetarian runs McDonald’s?”

The others all laughed.

“Their master franchisee for India, I meant,” the magnate smiled. “Fascinating, as I said, but I haven’t the time now to discuss it all. You simply must read up on it.”

“I will,” I assured her.

“India has made amazing strides,” offered the tycoon. “In the nineties, I remember being mobbed by beggars in the streets of Mumbai, while now they’re all selling things instead. Indians want the same things we’re used to in the West.”

“Quite true,” the magnate nodded. “But our country is building for a future many Americans don’t even imagine yet.”

“Too true,” nodded the tycoon.

“Now, I know what the good doctor’s background is, but Johnny, what is your field?”

“I started investing as an electrician.”

“Ah!” the magnate exclaimed. “You’re my nemesis! Here I am, trying to connect countries wirelessly and a man dedicated to wires sneaks into my midst.”

“Don’t worry about that,” Johnny laughed. “We still have plenty of common ground if you’re using electricity.”

“Fair enough, young man. We’ll have to discuss that sometime.”

“Follow me, guys,” Johnny said, as a crowd slowly began to build up around the perimeter of our conversation.

“Actually, I’ll leave you gentlemen to talk without me. There are still some people I must see,” offered the woman from Mumbai, nodding her head at each of us in turn, ending with the green-metal maven. “Very good to meet you, Johnny, Doctor Anderson. I’m certain our paths will cross again. But you call me soon, you green-metal maven. We have much to discuss.”

She made her way through the circle of eavesdroppers around us, and Johnny led us the other way.

We walked out of the hotel, crossed the street, and ducked into an alley to find a trendy little coffee shop. Johnny recounted how he’d first met the maven at a conference in Munich, Germany, and the life-changing experience he had after hearing his first major keynote.

“It was going to be pretty hard to get rid of someone that tenacious,” the green-metal maven noted. “After meeting Johnny in Munich, I used to laugh to myself about whether or not this guy actually thought I was reading all the email he was sending me.”

“I started off asking you every question I could think of,” Johnny explained. “And then I just went ahead and started sending you my blog every month.”

“Wait. What blog?” I asked, genuinely surprised.

“Later, Doc,” Johnny suggested.

“So, after a couple of years, one of my bankers in Hong Kong forwards me this piece written by none other than Sparky here,” said the tycoon, apparently paying me no mind. “I was bored on a flight, so I read it. And it was good, damn good. I took note of it and the next time he emailed me, I finally gave him a response.”

“Yeah. A two-word answer if I recall—‘nice work,’” Johnny smiled.

“What was the blog about?” I asked.

Instead of answering my question, the maven nudged a middle-aged man standing in front of us in the coffee line.

“Excuse me, sir. I have a little bet with my friends. If you can answer this question, I have to buy a round of coffees for everyone in the line.”

“Hey, friend, what you got? I’ll do my best to get ’er right.”

“How much does copper cost?”

“What?”

“Copper, the red metal.”

“Like in a copper pipe? I don’t have a dang clue. You got a question I might actually have a chance to answer?”

“Thanks, pal. Sorry to bother you. Coffee’s on me.”

“Well, thank you very much,” the man grinned.

Johnny put his hand over his mouth to stifle laughter.

“See what just happened there, Doc?”

“How do you expect him to answer that?” I asked, gradually being more comfortable with the first billionaire I’d ever met. He came off as sarcastic, so my gut feeling was to go with that tone in our chatter.

“Sparky’s blogs were about exactly that. Very few people—and I’m talking even sophisticated folks—have the slightest clue where everything comes from, let alone the real price or value of it. The investment world has been polarized ever since the commodity prices took off in the early 2000s. Some analysts and investors think China is a bubble and when it explodes, commodities will crash to their long-term averages, while others, me included, feel the growth phase around the world has a decade or two to run. Johnny’s blog looks at both sides of the argument with the most important part being that the average guy walking down the street has no idea if commodities are fair value or overvalued.”

As we sat down to drink our coffees, Johnny, or as we now called him, “Sparky,” just leaned back and let the conversation flow. It was clear that he was letting me enjoy the experience, while at the same time getting his annual update from someone he truly admired. It was a great thrill, and I was proud to be associated with Johnny, appreciating how far he had gone out of his way to open up this entirely new world to me.

“All right,” I said, “first, I want to let you know that I thought your presentation was brilliant, so let’s just get that out of the way. Now, I don’t want sound like a crabapple but I have always considered myself to be an environmentalist, and it’s no secret that your entire industry gets painted with a similarly caustic brush, even though I can appreciate that there are good mines and bad mines. But how can I reconcile my beliefs with the possibility of investing in a mining operation?”

“Oh, you think you’re an enviro-crusader?” he interrupted. “I am the world’s biggest proponent of green energy, and, in turn, I’m a realistic environmentalist. I imagine a world where, year after year, we support and explore new technologies that make the possibility of burning less fossil fuels more likely. That’s the environmentalist part. I’m realistic because if we want to burn less coal, natural gas, and oil, all of which are finite resources, we have no choice but to have reliable access to the building blocks that make these long-term solutions possible for the generations to come. Now here’s a question for you—will there be more or less electric automobiles in the coming decades?”

“Well, the problem with electric cars is range and reliability, but yes, I think anyone could agree we’ll see more brands adopting electric models and consumers will likely buy more.”

“Great, now how are we going to charge these cars?”

“With electricity, of course.”

“What kind of electricity? What most people forget is that we still need to fuel these cars with power—electric power—and most of the world’s electricity comes from oil, gas, and coal. I vote for less fossil-fuel electricity and more innovation, more green energy, and more people making it possible.”

“Okay, so as Sparky would tell us, the greener and cleaner we create energy, the more that is demanded of copper.”

“Yes, society needs to have access to copper. It’s not just the red metal, it’s also the green metal. There is little wonder it oxidizes into a brilliant turquoise green. Perhaps the big man upstairs was giving mankind a clue as to its many magical uses.”

“Point taken. But it’s going to take a little more convincing before I become an avid promoter of hard-rock mining.”

“Let’s assume you are the biggest environmentalist in the world. We can both agree that it is very inefficient dictating policy to people in the developing world, correct?”

“We can use awareness and innovation. Nobody wants to breathe polluted air. However, demanding that people in growing parts of the world install deluxe systems to capture carbon has proven to be a very difficult discussion. That much we can agree on.”

“So, perhaps a better way is to inform and educate. At a minimum, even hardened greenies need to fly to their meetings, ride a bicycle to get around, take hot showers, and watch engaging programs to stay current. Do they make bamboo airplanes? Can they print books without paper? Or can you read the latest Greenpeace missive on your e-reader without recharging it from time to time? How can they deliver the seeds for your community garden and where is the water coming from to make it grow? Where do you think the building blocks to every single thing you are looking at come from? The earth, that’s where.”

“Johnny and I have already had this discussion,” I replied. “All the stuff from up here, most of which now has an electrical cord sticking out the back of it, comes from the commodities down there.”

“Precisely. Glad we agree on that. The second part of it is to acknowledge that we, the West, or the green movement, cannot prevent them, the developing world, from having what you and I take for granted. They are not marching to the same tune that protesters are drumming—they simply want a better, healthier, and more comfortable life for their families.”

“There is no army, no government, and no spiritual force that can stop them,” I said.

“Hey! That’s my line!” the billionaire snapped back.

Johnny burst in to give credit for his mantra to the tycoon. You could see how a decade of being a contrarian had rubbed off on him. It was already beginning to shape the way I was talking after much less time.

“The other thing that we cannot control is the urbanization of these people. In the past twenty years, around five hundred million people have been removed from poverty. The five hundred million before them took a staggering hundred years because change took so much longer before. It’s estimated that the next five hundred million will begin to participate in some kind of city life in only one decade. Imagine! The progress that has been created needs to double. ...

Table of contents

• Cover Page
• Title
• Copyright
• Dedication
• Contents
• Preface
• Foreword
• One: The office call
• Two: Wires and hamburgers as the modern portfolio
• Three: Financial soap operas
• Four: The global shift
• Five: Stuff comes with an electrical cord
• Six: The spending class
• Seven: The 4% club
• Eight: The keynote
• Nine: Lunch with the realistic environmentalist
• Ten: Planes, trains, and rickshaws
• Eleven: Awakenings
• Afterword
• About the Author