| | Given the way the stock markets have been performing lately, big-time investors and bank analysts alike advise people to "sit on the sidelines and wait things out, because in the long term the market goes up."
Everything's great over the long term... if you are really rich!
When you are really rich things are great. When you are really rich you can go invest in those really good municipal bonds that yield more than treasuries, the ones that you have to buy in $500,000 increments typically, although maybe $100,000 will get you in the door. When you are really rich who the heck cares if you sit in cash for the next 18 months. Doesn't hurt you one bit.
When you are really rich it is great to have cash and watch real estate go down to prices that are reasonable or be able to go to a bank and say "what do you have in foreclosure?"
When you are really rich you can be like Warren Buffett, and wait for stocks to be really cheap and if they aren't cheap enough you can "sit on the sidelines" and do nothing. You can wait until there is blood on the streets and say, "I want to buy the great part of the muni reinsurance business from MBIA and Ambac and they can keep the bad stuff. Is that okay?"
These are the really rich kind of questions asked by really rich people. You don't have to be concerned about finding stocks that have good yields that could go higher. The pursuit of the next Diebold seems futile. Who the heck cares? The idea of trying to make money to make up for your paycheck's inadequacy, who cares? Some of these people don't need a paycheck, or they pretend to need one just to seem like you.
But if you are not really rich, it is real bad out there.
If you are living in America, your house is losing value -- and it is, stop kidding yourself, if you try to sell it, that house will be worth less than it is right now. You buy a house, it is like a car, it is worth less the moment it comes off the lot. Your portfolio is down big since October unless it was a portfolio of gas and gold and fertilizer. And the TSX, for the most part, trails the DOW, so our Canadian portfolios haven't fared much better.
Well of course, if you are rich and you can just sit on your ass and do nothing for 10 years, then risk nothing. But if you are not rich and you are never going to get rich if you do nothing, then you have to take some risks to do it.
Right now there are many situations
that aren't working. But if you know the dollar is going to be weak --
a real rich person's supposition -- if you know that real estate is
going down -- another rich person's supposition -- and you know that
there is uncertainty in Washington -- another supposition shared by all
-- and you know there is a world wide energy shortage -- something
everyone knows -- then why can't we try to profit from those and
identify stocks that are in the gold, natural and gas and overseas
markets?
What's so outrageous about that?
The bottom line is: doing nothing is a luxury that 99% of us average investors can't afford. You have to work your money to make more money.
For those who would criticize that notion,
here's what I have to say: You are rich, good for you -- now let others
try to be rich. Empathize with their plight in this environment. And
stop knocking those of us who try. |
| | Posted 3/3/2008 9:56 PM - 27 views - 0 comments
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