8-28-13 7:58 AM EDT | Email Article

By Paul B. Farrell, MarketWatch


SAN LUIS OBISPO, Calif. (MarketWatch) -- New investment strategies, dead ahead. Not just for America's 95 million investors. But for the climate-change deniers like Big Oil and the Koch brothers. The trigger: "megafires" destroying treasures like our national parks. Time for a "mega-wakeup call."


Act now, because the climate deniers will soon do a megashift and stop denying. Got that? Denialism will soon stop. End. So get out in front of this historic shift.


Big shift? Yes. "Megafires" are dominating the media. More immediate than such climate disasters as rising seas, floods, smog, dying bees, melting glaciers, even superstorms. All of those are easier to deny. But, every year now, these once-rare "megafires," burning 150,000 acres at a time, are destroying forests and homes at an accelerating rate. This is the "new normal." And it's highly visible.


Megafires are fulfilling the Pentagon's two-decade-old prediction, reported by Fortune, that "by 2020 there is little doubt something drastic is happening."


"As the planet's carrying capacity shrinks," that prediction continued, "an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge" and "warfare is defining human life."


The Age of Megafires is official with Yosemite, a national treasure under threat as the adjacent Stanislaus National Forest burns, putting in peril the main reservoir for San Francisco's water supply and two hydropower plants. We were first warned of the megafires phenomenon six years ago by CBS's "60 Minutes." Earlier, the Pentagon had predicted "massive drought, turning farmland to dust bowls and forests to ashes."


The Rim Fire threatening Yosemite is one of many recent such disasters. America has had 60 costly megafires in the past decade. The trend is a departure from a history. Megafires were rare in earlier decades and centuries. Worse: These new megafires may be on track to destroy America's forests forever. The Atlantic warns: "The Southwest's Forests May Never Recover from Megafires." Never. As in gone forever. The Age of Megafires is itself raging out of control, destroying America from within, while climate-change deniers get rich watching the warming from New York skyscrapers.


Megaprediction: Climate deniers go out of business


Now, imagine the mega-opportunities. Soon climate-change deniers will be hit on the bottom line -- hurting profits and stirring shareholder rebellions. Imagine ExxonMobil; Du Pont; Massey Coal; J.P. Morgan; the Koch brothers; the Chamber of Commerce lobbyists; Senators Inhofe, Cruz; and others in the Washington's hard-line climate-denying conspiracy all shocked awake as climate disasters rage and the toll mounts. Yes, megafires are a trigger igniting focus on the growing accumulation of disasters, from rising seas to drought to floods to melting glaciers to superstorms.


Here's a big prediction -- and you can take this prediction to the bank, invest on it -- by 2020, as fulfillment of the Pentagon's prediction impacts America's homeland, climate deniers will go "out of business." They'll be shocked, as profits are so threatened that longtime deniers are forced to accept climate change as real, work with it, and seek new profit opportunities in the wake of the megafires and other climate-related disasters. Bet on it. The deniers will have to lose another presidential election first. But party pragmatists will shift away the rigid ideological dogma of denialism that's degrading our economy along with conservative principles.


12 economic sectors burning hot


So, how will you be investing in the next decade, from 2014 to 2024 (let's call it the end of the next president's second term)? Look beyond. Despite media warnings, too many investors are still trapped in denial after a 30-year bond bull, stocks doubling in a bull run since 2009. Both are over. Short-term volatility lies ahead. Bonds and stocks will be rattled for a few years.

-Paul B. Farrell; 415-439-6400; AskNewswires@dowjones.com


True investors take the long-term perspective.


Here's our strategic investment model based on the 12-part formula in Jared Diamond's classic "Collapse: How Societies Choose to Fail or Succeed." He analyzed 12 macroeconomic sectors that influenced how nations and economies self-destruct or survive and thrive. As population increases, Diamond says, "more people require more food, space, water, energy, and other resources," often with unintended consequences that threaten economic growth. Fortunately, in the near future, they will also reveal vast new investment opportunities for all former climate deniers:


1. Water as the new gold: Warren Buffett says you should buy what you know. So buy water, essential for drinking, industry, agriculture and transportation. It used to be everywhere. Fortune says, "Water is the new gold in the 21st century," more valuable than fuel. As global population explodes from 7.3 billion to a forecast 10 billion in 2050, water will "trade like oil futures." Also soft-drink bottlers, purification and desalination systems. Opportunity: Corn farmers in eight states losing 60% of aquifer capacity by 2060.


2. Become a farmer and invest in commodities: "If you want to become rich, become a farmer," says Jim Rogers in his best-selling "Hot Commodities." The United Nations estimates that over a billion people are poor subsistence farmers living on the equivalent of $2 a day. What if we doubled their income? Ag giants like Monsanto (MON), with fertilizers, pesticides and seeds, have a huge stake in their future. Investor Jeremy Grantham says the planet can't feed 10 billion people. Others focus on innovations and new profits.


3. Land banking and land development: Rich nations and billionaires are investing in farmlands. Productive agricultural land can yield 25% returns. Critics warn of land grabbing: rich nations buying the wealth of poorer nations. But, rich or poor, populations are exploding, and people crave better lifestyles, more food. Read more: Grain.org identifies 416 giant land grabs -- comprising 85 million acres in 66 counties.


4. Forest lands: Demand for lumber and urban real estate are exploding. China and India plan 500 new cities. Half the world's rain forests and natural habitats are already urbanized, depleting resources and dumping pollution. Water and wind erode soils at a rate of 10 to 40 times soil formation. In forests it's "between 500 and 10,000 times," due to megafires. America needs solutions.


5. Fossil fuels, oil, coal, natural gas: OK, so you're not a billionaire, but can see the mutual-fund firms with hundreds of billions in oil and natural-gas commodity funds. Pimco's Bill Gross predicts a "significant break" in the world's "growth pattern." His new-normal vision calls for a decline in consumer spending as economic growth slows and "corporate profits become static." Yet every investor needs energy securities, even if we are past the "peak oil" tipping point, so buy alternatives.


6. Alternative energies: In "The Quest," energy expert Daniel Yergin says alternative energies will hold a 20% niche market for decades. Fossil fuels lock down 80% beyond 2050. An article in the journal Foreign Policy confirms Yergin's forecast: Biofuels, solar, wind and nuclear are not be a "major ticket." But with America spending over a trillion dollars annually on energy, alternatives will grow even as fossil-fuel costs increase.


7. Solar Power -- plus space rockets and robots mining asteroids: Sunlight's not unlimited. We could max out by midcentury. But enlightened minds are already investing big in innovative alternatives, fuel cells, batteries. When the Mars Rover project shut down, Silicon Valley privatized the Mars engineering team, tasking it with building rockets and robots to mine 10,000 asteroids for new resources that could be worth trillions.


8. Ozone protection -- geoengineering climate change: Yes, humans, cars and industrial plants produce carbon dioxide that escapes into the atmosphere, destroying our protective ozone, reducing solar energy. Innovative geoengineering plans are under development to explore the use of space rockets to block harmful solar rays, reduce global warming, reducing resource depletion. Bigger ideas lie ahead.


9. Mining, chemicals, minerals -- economic growth vs. public health: Human solutions have unintended consequences. Mining generates economic growth, while it also pollutes air, soil, rivers and lakes with materials that break down slowly or never. Insecticides, pesticides, plastics and detergents upset the balance between economic growth and public health. Solutions are usually matters of public policy, politics and regulations as balanced against business plans.


10. Species diversity: Diamond explores the consequences of transferring native species to new lands, such as the unpredictable preying on native animals and plants that lack evolutionary resistance, and infect native species with new diseases. "Wild species and genetic diversity has been lost," he writes, "and at present rates, a large percent of the rest will disappear in half century."


11. Population growth to 10 billion by 2050: Scientific American says population is "the most overlooked and essential strategy for achieving long-term balance with the environment." Time to wake up. Stop ignoring and find a new solution. In our 12-factor formula, population growth is the key independent variable influencing all others. By 2050, there are projected to be 1.4 billion people each in China and India. Experts challenge the projections: Earth Institute's director, Jeffrey Sachs, says even 5 billion is unsustainable.


Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(MORE TO FOLLOW) Dow Jones Newswires

08-28-13 0758ET

Copyright (c) 2013 Dow Jones & Company, Inc.
Copyright 2014 MarketWatch
Add a Comment

News   More...

Start Premium Trial Register For Free

P F Fund Financial Data (13,000+ funds)
P F Stock Financial Data (7,000+ stocks)
P F Stock and Fund Screeners (basic)
P F Investing Articles and Market Commentary
P F Articles Archive (>30 days)
P F Discuss (dozens of stock, fund, bond, and general bulletin boards)
P F Portfolio Manager (basic)
P F Morningstar Investment Classroom
P F Access Your Portfolio Anytime, Anywhere via Your Mobile Device
P   Morningstar Fund Analyst Reports (full research on 1,700 funds, ETFs, and CEFs)
P   Morningstar Stock Analyst Reports (full research on more than 1,100 stocks)
P   Portfolio Manager (advanced with 10 X-Ray analyses, including recommendations)
P   Portfolio Monitor (monthly and on-demand personalized portfolio statements)
P   Morningstar Proprietary Stock Information (stock star ratings, buy/sell prices, economic moat ratings, and more)
P   Morningstar 5-Star Stock and Fund Favorites & Red Flags eNewsletters
P   Premium Stock and Fund Screeners (advanced with nearly infinite ways to find the best securities for you)
P   Discounts on Morningstar newsletters, books, seminars, and more

Sign-up to Morningstar

Basic Access

Articles and Videos
Morningstar video reports, articles, data, and tools. Dig into our lineup of e-newsletters and investing classroom courses outlining sensible strategies for maximizing your investments.
Morningstar Discuss
Follow the buzz on individual stocks or fund families. Plus, read the latest posts from Morningstar members and analysts.
Portfolio Manager
Track your investments and watch lists with our Portfolio Manager. Customize your view with our comprehensive stock, fund, and ETF data.

Access these features and more when you sign up for Free Membership.
Join Morningstar today. It's Free.

Unlimited Access

Analyst Research
Gather in-depth, actionable insight on over 3,700 stock and mutual funds covered by Morningstar analysts. View our mutual fund Analyst Reports favored by professionals, savvy experienced investors, and new investors researching options for retirement savings, college plans, or other investment needs.
Portfolio X-Ray®
Ensure your portfolio is positioned exactly how you want with Morningstar's X-Ray Interpreter and Stock Intersection tools. A Barron's "Best of the Web" award winner for five years running, X-Ray Interpreter goes under the hood of your portfolio to provide a useful allocation, sector, and geographic analysis. And you can discover how much of a stock you really own, individually and through mutual funds, with Stock Intersection.
Investment Picks
Find new 5-star stocks (greatly undervalued companies) to consider daily. Our 5-star stock rating is a proven winner, consistently beating benchmarks like the S&P 500. Plus, browse our Fund Analyst Picks and Stewardship Grades to find shareholder-friendly mutual funds that are poised for outperformance.
Portfolio Monitor
Get a clear view of your investments with personalized reports about your portfolio. Receive monthly statements and generate reports on-demand to help you stay on track to meet your investment goals.

Access these features and more when you sign up for Premium Membership.
Start your free 14-day trial today online
Your subscription may be tax deductible. Please contact your tax advisor.

Content Partners
Morningstar - 2013/8/28 - UPDATE: Get rich in the 'Age of Megafires': 2014-20
Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol |  Title Star Rating |  Category |  Total Assets |  Top Holdings |  Top Sectors |  Symbol |  Name Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol / Ticker |  Title Star Rating |  Category |  Total Assets |  Symbol / Ticker |  Name Title |  Date |  Author |  Collection |  Popularity |  Interest Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Author |  Collection |  Interest |  Popularity

Previous: UPDATE: Get rich in the 'Age of Megafires': -2-  |  Next: UPDATE: Get rich in the 'Age of Megafires': 2014-20