Opportunity here... Nov 02, 2007 - 07:40 AM
I received a blog response offline, but since it was sent privately I won't print it here, but it prompted some thoughts. It's not all doom and gloom about the economy - there's some opportunity here. I mentioned investing in foreign currency and precious metals to a co-worker, and my thoughts on the monetary crises and China owning us, and my co-worker scoffed and brought up all this boilerplate stuff about how strong America was and such, and I thought, 'wow, so that's how the rest of the world thinks.' If most people don't see it, then there is a huge opportunity here to buy cheap and sell dear. There a butchering of a paraphrase of a quote, something like "Would you rather be right, or would you rather make money?" This refers to smart people who take a position in a stock. They take this position because all their analysis tells them that this stock should rise. But then the stock falls. And all the time they won't cut their losses because, dammit, they are smart and they are never wrong. So they stay in their position and watch their stock go to zero.
I only do what works in practice, and if I am wrong on this I am wrong and will reverse direction, but right now there's an opportunity to make money and I am grabbing onto it and advise others, if they are able, to grab onto it too.
I'm positive I don't know all the facts, but the facts I do know scare the hell out of me. The Iceland CD has increased over 5% in the past month since I first recommended it, mostly due to the dollar depreciating. That's 60% annualized - better than any savings account. Metals are soaring. Most stocks will tread water. Yes, it is good to be diversified, but right now we are experiencing a bull market in commodities including gold, silver and oil, and a bear market in stocks - especially anything US related. Buying into this bull market is what I would do if I was able. Stocks are pretty iffy, but since the fed is lowering rates they may do alright for awhile...
Perhaps I am inciting a riot, but frankly I just think most people are too complacent, or are afraid to take a position because of the disagreements they may run into. This applies to investing as well - people are afraid to invest because they might lose money. I say, after a period of analysis, make a decision - to invest in something, anything. There is no downside (except losing money ;) ). But if you look at it as an education, and realize that education costs money sometimes, then you watch your decisions and evaluate the results. And if you are right the market rewards you, and if you are wrong - you have learned something and paid the price of your education. So you go back and re-analyze and try another investment. Don't invest all your money into a single idea. Invest small amounts of money in many different things. And when you lose in one area, sell it and plow it into the ideas that work. If you can't decide, then get into an index fund, or find a master investor who has a fund (like Warren Buffett's BRK A , or more likely Berkshire B funds) and invest in him and his ideas. I like MKL right now, run by master investor Tom Gaynor. Buying into his fund is like buying Berkshire Hathaway back in the 70's. (it is only $545/share, and not $131,250 like BRK-A shares . Just imagine if/when it gets to that level!) What you don't want to get into is "analysis paralysis" - just analyzing and analyzing afraid to make a decision because you "don't know all the facts." Well, here's the thing - no on knows all the facts. You stay as informned as you can and you make a decision, right or wrong. And keep making decisions. If you keep this up (and you have your observation and analytical mindset cap on) you will make better decisions. And if you don't want to make those decisions, then invest in something like MKL and let Gaynor make those financial decisions for you. He's a master trader, why not let someone who is smarter about investing take care of your hard earned dollars? 
Trade Like Warren Buffett (Wiley Trading)..
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