Aristotelian thought describes it as “the golden mean.” Buddhism is rooted in the “the middle way.” “Buy the business” isn’t nearly so resonant, but it could be very consequential, at least at the scale of you and your portfolio. For us “buy the business” helps center our focus on the goal of building wealth over the long term. The stocks we recommend are backed by high-quality businesses capable of sustaining and growing dividends now and in the future. Minding what’s happening at the company level is our priority. After all, the macro picture is simply a composite of innumerable micro pictures.

It’s easy to lose focus, however, amid the market’s wild reactions to what remains essentially stasis in the developed world and slowing-from-excited-level growth in the emerging economies. The drama in Europe continues, but it’s still too early for even the best long-distance mind-reader to say whether a market-satisfying solution comes from this week’s EU summit in Brussels. And in America a highly politicized atmosphere makes any meaningful attempt at a fiscal remedy moot, and even theoretically independent central bankers have been warned off by aspiring major-party nominees.

It certainly is a stirring cocktail of prognostications and intrigue capable of inducing emotional outcomes. Witness copper’s 7 percent spike during Monday’s trade, no truer a gauge of current economic conditions than is today’s triple-digit decline at the open for the Dow Jones Industrial Average. The Standard & Poor’s/Australian Securities Exchange 200 Index jumped 2.7 percent to start the week, juiced, like copper, by an upside surprise on early Chinese manufacturing reporting for October, but only muddled through on Tuesday to close down 0.64 percent.

Copper producer OZ Minerals Ltd (ASX: OZL, OTC: OZMLF, ADR: OZMLY) nearly matched the metal’s Monday performance with its own 6 percent gain. OZ, covered in the October Australian Edge In Focus article on potential merger-and-acquisition activity in the Australian mining space, retreated on Tuesday, though, along with the rest of the market. The company’s copper production declined sequentially from the calendar second quarter to the third because of a major scheduled maintenance shutdown.

The company did report “a good quarter of operations” at its Prominent Hill mine, as the shutdown was the shortest to date–five days–at the facility. Third-quarter copper output was 27,217 metric tons, down 2.9 percent from the previous three months but up 1.4 percent year over year. Nine-month production was 80,942 metric tons, on track to meet management’s full-year guidance of 100,000 to 110,000 metric tons of production.

The 0.64 percent Tuesday decline is actually a refreshing result, as it’s neither a frenzied selloff nor a blind rally. In the current context a loss of less than 1 percent has to be considered moderate. It’s also notable that 15 Australian Securities Exchange (ASX) listings were in the green for every four that were in the red, and that volume was in line with long term averages. Based on recent history, however, we’ll see another swoon Down Under, perhaps following on today’s action on the New York Stock Exchange.

Monday’s rally was driven by the HSBC Flash China Purchasing Manager’s Index for October, which was 51.1, up from final reading of 49.9 in September. This allayed fears of a hard landing for China, at least for a day, and apparently drove many speculators short Dr. Copper to cover bets placed on the proposition that the engine of the global economy is rapidly cooling. And next week we’ll review different reasons why we had similarly choppy action in these or other benchmark indexes.

China is the critical one among many emerging economies that are changing the global supply/demand equation for any number of resources critical to industrial development, including copper as well as iron ore, coal, hydrocarbons and agricultural commodities. In addition to new competitions for critical inputs that are upsetting decades-old systems and assumptions, there is the perception that China threatens US geopolitical hegemony as well. Right now China has to consider the US a partner, however, rather than an adversary, as the Middle Kingdom still depends on the American consumer.

Two developed economies–Australia and Canada–are blessed with copious amounts relative to their respective populations of the resources that China and other emerging markets are hungry for. And they continue to provide for developed economies as well, Australia most notably with a rebounding Japan, Canada with its southern neighbor, with whom it still forms the biggest bilateral trade relationship in the world. Stable, Western-style institutions ensure these resources are exploited efficiently, to the benefit of their private operators as well as the public at large.

Our goal is to identify ways for individual investors to build wealth by investing in high-quality businesses that pay sustainable and growing businesses, whatever is happening at the geopolitical or macroeconomic level. Australia and Canada, well positioned for this remarkable global transition that’s underway, are attractive jurisdictions.

The recent credit/financial/economic crisis accelerated a process of equilibrium-finding that globalization had already ushered in. What promised to be at best an uncomfortable transition for many Western economies settled into worst-case territory as the incomprehensibly huge misallocation of resources into the US real estate market is reckoned with. Deleveraging is going to take awhile, and it will hamper the US and Europe for probably the next half-decade at least.

But all that this means is that we’re playing on a bigger map. Slower growth in the US and other developed economies does not necessarily imply fewer opportunities to find high-quality businesses. In fact it means the opposite. The types of essential services and fee-generating assets we prefer are still generating cash flow for businesses and investors in America. What globalization means is that we can access similar opportunities all over the world.

If you’ve done well to build a portfolio comprised of high-quality businesses, what happens during the macro circus becomes mere entertainment. “Buy the business” is a golden way to build wealth over the long term.

Dividend Investing in Australia: What’s in the Flash

The HSBC Flash China PMI, referenced above, is based on data compiled from 85 percent to 90 percent of the more than 400 responses to HSBC’s monthly PMI survey. Questionnaires are sent to purchasing managers for small, medium and large manufacturers, including state-owned and private businesses.

The Flash report is released a week ahead of the final PMI reading. The final PMI reading for October is due Nov. 1. The rise in the October HSBC Flash PMI is the first since March. The manufacturing output sub-index rose to 51.7 in October, a six-month high, up from 50.3 in September.

The HSBC PMI has lagged the official PMI data compiled and released by the Chinese government. In fact apparently until October it had lingered in contractionary territory–below 50–since July. The HSBC survey includes more small and medium-sized businesses than the figure released by the China Federation of Logistics & Purchasing, the official reporter. These respondents are likely bearing the brunt of official efforts to cool China’s economy in 2011 in the form of harder access to capital.

The Australian Securities Exchange: A Note on Time

The Australian Securities Exchange is open for “normal trading” from 10 am to 4 pm Sydney time, which is 15 hours ahead of US Eastern Time. For example, when the New York Stock Exchange opened at 9:30 am today, it was 2:30 am Wednesday morning in Sydney. The ASX will open for Wednesday trade at 7 pm US ET Tuesday.

The Roundup

Income Portfolio Holding APA Group (ASX: APA, OTC: APAJF), which owns and operates gas pipelines all over Australia, reportedly is considering doubling a planned AUD500 million loan to AUD1 billion after 15 banks expressed interest in participating in the funding. APA has AUD586 million in debt coming due in 2013, of an overall total of AUD2.4 billion. The company will likely be able to lock in lower rates on what’s reported to be a two-part revolving facility with a three-year term and a five-year term.

APA executed a five-year, AUD150 million revolving facility with Commonwealth Bank of Australia (ASX: CBA, OTC: CBAUF, ADR: CMWAY) in early October.

APA Group has also moved up in classification from the “grey” market to OTC Pink by OTC Markets Group Inc, which operates what’s commonly referred to as the US “over-the-counter” market. OTC Markets’ electronic interdealer quotation system allows broker-dealers to trade securities that aren’t listed on a major US exchange. It organizes the OTC marketplace into three tiers based on the level of disclosure companies choose to provide to investors, OTCQX, OTCQB and OTC Pink.

The new designation is an acknowledgment that APA makes available for distribution through OTC Markets the financial reports and news it’s required to provide its domestic regulator and exchange. APA Group is a buy up to USDD4.20.

During the company’s Oct. 19 annual general meeting Income Portfolio Holding CSL Ltd’s (ASX: CSL, OTC: CMXHF, ADR: CHXHY) outgoing Chairman Elizabeth Alexander affirmed the company’s 10 percent growth forecast for 2011-12. The company is also nearing completion of a USD750 million private placement and a AUD750 million line of credit.

CSL is also planning to buy back up to AUD900 million of its own shares, or about 6 percent of those outstanding, over the course of the next fiscal year. CSL, an October Sector Spotlight and a recent addition to the Income Holdings, is a buy under USD35.

At his company’s annual general meeting  Chairman John Allpass said natural gas distributor Envestra Ltd (ASX: ENV, OTC: EVSRF) would post a net profit of AUD60 million in 2011-12, a 33 percent increase from 2010-11, despite lower-than-expected volumes in the three months ended Sept. 30.

Envestra plans to spend AUD200 million during the year expanding its networks and to connect over 25,000 consumers as well as to continue replacing old cast iron and steel mains. The company completed two private placements in the US in 2010-11, including a AUD172 million, 17-year bond and a AUD350 million package of 10-, 12-, and 30-year bonds.

Proceeds from the private placements were used to refinance AUD174 million of bonds that matured in May 2011 and to fund the company’s CAPEX program.

Envestra announced during its annual general meeting that it had finalized a syndicated loan agreement with Australian and international banks for AUD235 million; funds will be used to repay loans maturing in mid-2012. Thereafter Envestra will have no currently drawn loans maturing before July 2014 other than small amounts of commercial paper. Envestra also has a AUD100 million loan facility to work with. Envestra’s average debt maturity is currently 11 years, with term-debt maturities extending to 2042. Envestra is a buy under USD0.75.

Newcrest Mining Ltd’s (ASX: NCM, OTC: NCMGF, ADR: NCMGY) fiscal 2011-12 first quarter gold production was down 16 percent quarter over quarter and 13 percent year over year because of planned shutdowns at key mines and bad weather. Nevertheless, management re-confirmed its fiscal 2011-12 production and cost guidance. Lihir Island production was impacted by a planned 14-day plant shutdown that was extended by five days, while Gosowong output was hurt by lower planned feed grades and mill throughput. Higher costs for the quarter will likely come down as production ramps up over the course of the year.

Management is sticking to guidance that is ambitious at this point, 2.78 million ounces to 2.93 million ounces of gold at approximately AUD500 per ounce to produce, with progressive improvement throughout the year. Increasing production at Gosowong will be critical. Newcreast Mining is a buy under USD40.

New Hope Corp Ltd (ASX: NHC, OTC: NHPEF) has come back within range of our new buy-under price after soaring above AUDD6.50 in the wake of a board decision to explore a formal bidding process for the company. Reuters is reporting three names–India-based JSW Steel Ltd (India: JSTL), China’s Yanzhou Coal Mining Company Ltd (Hong Kong: 1171, NYSE: YZC) and London-based Xstrata PLC (London: XTA, OTC: XSRAF)–in connection with possible bids for some or all of the company. New Hope’s port facility makes it attractive to potential suitors. It’s also one of the last few independent coal companies left after a furious round of consolidation in Australia.

JSW could be interested in New Hope’s thermal coal and its export terminal because it’s having trouble securing fuel for the operational and planned power plants its energy unit runs in India. JSW imports almost all the coal it needs to run its more than 2,000 megawatts of generating capacity, and it experienced a rough doubling of prices early this from 2010 to 2011 as bad weather hampered production in Australia.