The Davos World Economic Forum opened with a report warning that the biggest risk to the world today is extreme weather events. You now know why even before he was locked up in the White House President Trump decided to boycott the meeting. The report was written to boost the move to a low carbon environment by the chief risk officer of Zurich Insurance, Alison Martin. We no longer own ZURVY but like other P&C insurers, it was hit last year by serious claims increases.

She said that the world faces an $18 trillion gap in global infrastructure spending by 2040 and recommends that businesses develop “a climate resilience adaptation strategy.” Apart from insurance claims, the gap will result in loss of biodiversity, extreme weather events, great climate change, and man-made and natural disasters galore. She concluded: “in relation to the environment the world is most clearly sleepwalking into catastrophe.”

Commentary by JP Morgan-Chase earlier said Trumpian climate change denial created a “green wave” of investment money into environmental exchange-traded funds precisely because of the White House head in the sand. But the amount invested was under $750 mn, not enough for Ms. Martin.

Spear's magazine caught my mood best. “The Brexit saga feels like Groundhog Day denuded of its punch-lines and retold by Kafka,” it wrote today. Now for all intents and purposes, both the US and Britain face government stalemates which would have been unthinkable in the last century when I was learning about politics.

The impact is not just confusing; it is also incomprehensible. An example: sterling rather than falling as one would have expected after the crushing defeat of PM Theresa May's deal with the European Union, in fact, is rising against other currencies. And as is customary when currency moves up, the country's multinational corporation stocks lose traction, in this case, the FTSE 100. Other smaller cap firms' stocks are simply going up in the USA, totally contrary to my expectations. And I am taking advantage, with details supplied to paid subscribers. Small-cap advantage is back outside the US!

We start with a new share pick. And then there is news from Britain, Ireland, Chile, Australia, Canada, Brazil, China, South Africa, South Korea, Israel, and Belgium.

*Despite being subject to an official anti-trust probe in China, China Mobile (CHL) is recommended by both Value Line and Barron's.

Reader FBN, himself a retired fund manager, recommends the 5:1 ADRs at around $51.5, a p/e ratio of under 11, with a possible yield of nearly 5%. It is forecast to be growing its earnings this year by 18%. Its dividend record is variable as it raises and cuts the payout ad libitem, one reason the share price was halved last year. While FBN's last stock recommendation was a dud, it makes sense to put more money into Chinese development now, in my opinion.

New Barron's Roundtable guru Rupal Bhansali, CIO of Ariel Investments here in NYC, admitted she is “negative on China from a macroeconomic perspective', but then saying CHL is my top pick” as “it is the cheapest stock in the world” which “happens to be in China.”

She says that there isn't a stock market, “but a market of stocks.” “Equity investing has always been about not paying up for what you get. There is a growth scarcity and the world has to pay up for it.”

She also said “passive is going out of favor” which appeals to both me and FBN. She opined that “cash will no longer be a 4-letter word.” Instead: “Debt will become a 4-letter word. The thing to bet on incoming years is net-cash companies.”

Value Line rates CHL 1 for timeliness, 3 for safety, and a low 4 (cut in Dec.) for technical. CHL produced a total return in 2018 of 0.2% vs. 33.1% in 2017 and 41% in 2016, so a turnaround is possible. The big “if” is the unpredictable 2019 dividend. I wound up paying $51.5465 because there has been too much focus on the share. Better a telco than a Chinese equipment vendor!

*I am selling half my holdings in Clydesdale & Yorkshire Banking Group (CBBYF), because it is up on currency changes and has a huge gain in my IRA. I set a target price between the wide spreads discussed in yesterday's blog as I think the market makers have had their chance. It is a big win.

*To fund this new buy in my regular account, I sold half my stake in Greencore, GNCGF, which is now mainly an Irish firm listed in London and operating in Britain, after it shut in its US arm. This ready meals firm is in my regular account and has been boosted by good results from a UK rival and a very large insider buy yesterday. It will do a buyback of its 37% of its shares at a 17.5% premium to be voted on Jan. 29 at the annual general meeting. But I fear that US owners will not be allowed to tender. The reason I suspect this is that GNCGF will not let foreigners read its tender circular.

*I averaged down on Banco Santander common, SAN, after the kerfuffle over hiring Andrea Orcel from UBS who has long been a mentor for SAN chair Ana Patricia Botin. Note that in Italy Andrea is a man's name; he is a man. Hiring him would have cost $57 m in deferred compensation replacement, big bucks even for Ms. Botin, who herself needs 5 years to earn that much money herself. The problem is not that he was selected; the problem is nobody did the math before offering him the job.

*Bank of Nova Scotia is expected to exit Thailand's Thanachart Bank which is merging with TMB Bank TCL.

*We are also exiting Thailand after it proved impossible to buy the stock tipped by Paul Renaud there.

*Big winners today were mostly from third countries, not the US or UK:

-Chilean copper miner Antofagasta, ANFGF, is up 3.4% in London;

-Australian Benitec Biopharma, BNTC, up 7.14%; 

-Canadian Computer Modelling (whose yield is 6.74% meaning its share price has collapsed.) CMDXF is up 17.25% after it was raised to overweight by Morgan Stanley; I am selling that out of my IRA also;

-Brazilian Cosan (CZZ ) up 5.68% after it was upgraded by Morgan Stanley to overweight;

-Chinese Hollysys, HOLI, up 2.24%;

-South Africa's Naspers, up 2.5% while it's 31% holding Tencent is more or less flat;

-Irish bookie Paddy Power Betfair (PDYPF, sold) rose 2.8% today as people made bets on Brexit;

-Teva of Israel is one of the rare big pharma shares up today, by 0.2%, as investors worry that

British drug supply chains will be unable to accept drugs approved for sale only in the EU. It also gained because its generic of Lundbeck's Sabril against epileptic seizures won approval from the FDA despite the Trump shutdown.

*A big loser today is Anhaeuser-Busch InBev, BUD, after it was cut to underperform from neutral by Jefferies. I averaged down too soon. It opened down 1.9%. I bought at $72.4435 and it is at $70.27.

*Insiders both bought and sold Canadian Algonquin Power and Utilities Corp.

*Tae Kim writes in Barron's that Apple should buy up Nintendo of Japan, which our India reporter recommended, to gain exposure to fast-growing gaming on its telephones which are not selling enough upgrades.

*UK defense share BAE Systems yesterday won a US Navy electronics communications and computing platform contract worth $78.9 mn over the next 5 years. It handles ship to shore, shore to aircraft, and shore to shore long-range linkages. Adding to the charm for the British, most of the work will be done in Oahu, Hawaii and a bit in Geraldton, Australia.

Funds

*South Korea's inflation is expected to modify down to 1.5% this year which boosted the won and our Korea Fund, KF.