Yellowstone Partners Blog

Greetings from the Raymond James Investment Manager Conference in St. Petersburg, Florida. We recently listened to a very compelling presentation by Jeff Saut, Chief Investment Strategist at Raymond James Financial.

He brought out some very interesting investment ideas, some of which we were already following, and some of which provide interesting new possibilities.

First among the interesting new ideas was the effect of the recent El Nino weather pattern on the ecosystem of the Humboldt Current and the consequent decrease in a significant source of protein for both human and animal consumption.

Apparently, there is a constant upwelling of cooler water from the Antarctic coast, along the western border of South America, which creates a unique environment where fish can thrive in water with colder temperatures and higher salinity – this is known as the Humboldt Current. Since fish are abundant in this ecosystem, so also, are fishermen, and it’s estimated that as much as 25% of the global fish production is drawn from this area of the world.

The kicker, then, comes in how the El Nino weather pattern is anticipated to affect the Humboldt current. As it happens, the easterly flowing countercurrents push southward into the Humboldt current, forcing much of the abundant fish deeper underwater and thus out-of-reach for the fishing operations.

The consequence of this process will potenially be a severe drawdown in the available protein sources for a growing worldwide population. Following the law of supply and demand, there is opportunity for a derivative play on other protein sources, to include livestock, fisheries, and even soybean producers.

These kinds of investment “tailwinds” provide a tangible story and figures to monitor for confirmation on an investment idea. Stay tuned for more details on what Jeff Saut had to say at the conference.