Summary: Defying The Market - Stephen Leeb and Donna Leeb

This work offers a summary of the book “DEFYING THE MARKET: Profiting In The
Turbulent Post-Technology Market Boom by Stephen Leeb and Donna Leeb.”

The most significant trend in technology today is a slowdown in the pace of
progress. In other words, the new generation of widely used products coming
out today are not presenting leaps in performance substantial enough to
present a compelling case for existing users to upgrade. In fact, many of the
latest products and services (like cellular phones and the Internet) are not
so much new discoveries as enhancements of existing technology.

The slowdown in technological progress, combined with the political imperative
for national economies to grow, the industrialization of the emerging
countries and the diminishing levels of Earth’s natural resources means that
inflation will once again become a major factor in the global economy. And in
an inflationary financial environment, any investment strategy that has
produced notable gains over the past 10 years will be entirely unsuitable.
In short, an investment strategy for the next 10- to 15-years should be
positioned so as to benefit from the effects of inflation. That means an
investment portfolio should have four key elements:

1\. Stocks and financial securities that will increase in value should
policymakers slip up and deflationary conditions eventuate.
2\. Consumer franchises -- stocks that have such wide name recognition they
can add value in any conditions.
3\. Stocks that are leveraged to grow quickly should inflationary economic
conditions exist.
4\. Stocks that are environmentally based -- that will add value should
environmental disasters occur.

Most investors assume technology will always have the answer for anything that
comes along, and that the stream of new technical innovations will stretch
seamlessly into the future. Historically, however, the most successful
investors have never been crowd followers -- they have always tended to think
for themselves, and to notice signs of change that other people overlook. For
these investors, the concept of a post-technology inflationary economic
environment doesn’t mean the end of the world -- just another opportunity to
generate wealth using a different approach.