The ‘financialization’ of the American economy is an era coming to a close, says Mayer’s Special Situations editor and commodities expert Chris Mayer.

So it’s back to the basics of wealth creation, to what Chris calls “the basics of owning and making useful things.”

It makes sense.

As Whiskey and Gunpowder’s Greg Grillot puts it, “A cow is a much better investment than a piece of over-leveraged debt.”

This from Chris:

A cow is, of course, a useful animal to have around. Maybe some chickens, too, and some farmland with ample water and a good stand of fruit trees. These things have always had value to mankind. We need to eat and drink. During times of crisis, people may make do with an old sweater and forgo buying a new one. They may patch up that old couch, skip the movies and pass on the latest iPod. But they always eat and drink.

I’ve been thinking more about the global food chain lately. In the last issue, I wrote to you about what I called the “topsoil crisis.” Fertile land is becoming an extremely valuable asset. And what I think will happen is that the whole food chain will become more valuable with it. It’s sort of like the oil story.

As the price of oil rose, oil reserves became much more valuable. But so, too, did the whole energy infrastructure — pipelines, refineries, companies and people who can build and repair oil rigs and such.

I think the same thing is happening — or will happen — with farmland and the entire food network that feeds this hungry planet. The ability to supply hogs and chickens and grains will become much more valuable.

Here are a couple more ideas worth rolling around in your head as you think about investing:

The stock selection process is complex.

Remember that unlike other professionals, a prudent and wise investor cannot afford to do what other investors do.

For example, if ten doctors tell you an appropriate prescription, then it’s wise to accept that consensus. Likewise, if ten engineers agree on the design of a bridge, then that’s surely the right way to build it. But if 10 investment analysts tell you to buy a particular stock — or gold, deutsche marks, denominated bonds or whatever — it is probably the wrong thing to do.

Investing inhabits a peculiar world. You have to walk with the minority as an investor. You have to have the fortitude to stand against the crowd. As Templeton says below, the only way to pick up bargains is to buy what people are selling:

Buy those things that are depressed. A security is depressed in price only when people are selling. There is no other reason why the price should drop to an undervalued level except the pressure of selling.

So in securities markets, you have to be prepared to do the opposite of what most investors are doing if you are going to get bargains and make superior profits in the long run.

These are certainly trying times. The recent market crash will test the nerve and resolve of every investor. But there is not much to do other than wait it out. And for those who have the stomach for it — and the means — it’s also a time to pick up some great bargains.

PS: Chris is onto something here. Keep a reserve of tangible assets: your physical gold and silver…maybe even some productive land if possible. Right now it’s possible to acquire some very productive companies who grow, extract, make or maintain the real stuff that humanity will always need. Having both the real stuff in your hands as well as stakes in the enterprises that produce the real stuff is a winning combination. Chris has very specific advice on what to buy in order to protect and grow your wealth, especially in times like these. Click here to find out more.

Source: In Crisis, Seek Tangibility