All About Me


Here’s the elevator version: I was born in Tokyo, Japan, then went to live in Buenos Aires, Argentina, then Lima, Peru and then Montevideo, Uruguay, all before I was ten. At thirteen, I was sent to boarding school in San Marcos, Texas, where I went to class and drank some beer. Then I went to Texas A&M for a semester and drank some beer and went to some classes. Then I went to LSU for a couple of semesters and drank beer. Then I hitchhiked to California and joined the Marine Corps before the draft board called my number.

I drank some more beer in the Corps, but got a few pointers on life in those three years.

After that, I got married, had four kids, lived in Oakland, New Orleans, Atlanta, New York, New Orleans again, and Vero Beach, where I intend to stay, having gotten sober here twenty-seven years ago. Some would say it was an interesting life. Seen through the bottom of a beer bottle, it was OK…maybe.

I am grateful for one thing about the first fifty years of my life: All of my children have grown up to be terrific people in spite of me. On the other hand, I don’t regret one damn minute of that dysfunctional era. I wouldn’t want to do it over,  but the experience gave me a lot to think about since I’ve been trying to grow up.

And, for me, it’s all about growing up. Emotional development stops when an alcoholic starts drinking alcoholically. That’s why so many alcoholics are jerks. I was a fifty year old teenager when I stopped drinking. But, never mind, the journey out of that miasma has been nothing short of wonderful.

As I slowly got my wits about me, I tried to figure life out. What are the priorities, I’ve wanted to know. David Brooks, in his book, The Road To Character, posits that we are in a contest within ourselves with divergent goals: resume virtues, and eulogy virtues. Things to brag about, satisfy the ego, and actions to nurture the soul.

My ego is never satisfied. Trying to give that sucker what he wants is a thankless task. Time spent doing the next right thing is better.

Brother Timothy, a Benedictine monk I knew, gave succinct homilies when he preached at mass. “If you just be good, you’ll be fine,” he said. I don’t have a better idea.

The quest, then, is what does it mean to be good? I think it comes down to my relationship with you. If we’re about you, it’s good. If we’re about me, not so.

I was seventy-six a few days ago. I’m fit enough and fully engaged in my work. I trade futures, something that I can do until I croak and they find me slumped over the quote machine, I guess.

I’m blessed with a wonderful soul mate in Cindy, my wife of twenty-three years. She just makes me better. Between us, we have six kids, six kids’ spouses/sig. others, and an even dozen of the best grand kids on the planet. All a joy to hang with.

The shot of me was taken by Bob Craig. Still half in the shadows, but emerging. That’s enough about me.



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Going Big or Going Broke?

golden arches

It was Saturday morning, and lunch for my wife, four kids, and me was the issue. The answer was McDonald’s. Fast, cheap and reasonably good (I liked the fries). Six burgers, six orders of fries, please, for which I gave the counter boy $1.50 and I’m back home in a flash.

The year was 1966. Minimum wage for part time workers was 0.70/hour and the kid at the counter was sixteen. The min wage today is a shade under 8 bucks and, unless I’m going big, I can replicate that lunch order for  $14.62, which is about right, given the fifty year interval.

But the “counter boy” is not a boy anymore. He/she is an adult trying to support a family, and $7.60/hour forces the worker to rely on food stamps, Medicaid, and God knows what other kind of assistance to get through the month.

Workers in the fast food industry are demonstrating for $15/hour, which would go a long way towards providing them a living wage. I’m all for it. Trouble is, the industry prices its product against a lot less in labor costs. Double wages and now it’s thirty bucks for the plainest lunch on the planet. That’s going to be a hard sell.

Any increase in labor costs plays havoc with already razor thin margins in that industry. The business model was never about giving families a middle class income. Today’s fast food worker was the factory worker of the past, forced down the line to work in one of the few jobs available to semi-skilled workers anymore.

Income inequality is not just about excessive compensation for corporate executives. The workplace for great swaths of the job market has been permanently altered. Much higher productivity is required for incomes to rise meaningfully. This is not likely to happen, given that indicators of economic activity are rolling over. Seeing this, few companies are putting capital to work for growth, preferring instead to buy back their own stock and pay out dividends.

The traditional sources of growth, new industries and game changing new technologies, are not on the immediate horizon. You won’t hear this from the Fed, but unemployment and underemployment will be around for a long time. The direction in both the economy and the capital markets is down, sure to worsen the situation for millions of families.

So, it becomes a social issue. Much is already being done, both privately and by government. Over 900 families with working heads of household in our county are receiving food every week from the privately funded local food pantry. Government programs are also available.

In my view, it is folly to be talking about cutting back on programs now. The conversation needs to be about expanding these services.

Unless you like the idea of people starving.




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To all but their colleagues, traders can sound unintelligible when shouting across the trading floor. “How’s Apple?” one yells. “Crowded trade,” comes the shout from the other side of the floor. Sounds like crowded train-a good fit because a crowded trade is a situation in which most of the players are aboard, a setup for eventual collapse. The wiser man, then, would stand down.

Crowded Trade

Today, the entire market is a crowded trade (or train, if you like). Here’s a look at how the participants feel and behave:

Fund managers are all in, holding almost no cash. This means they will have to start liquidating immediately when redemptions begin coming in.

Individual investors, likewise, have niggling amounts of cash in investment accounts, meaning little to buy with.

Traders, per the Commitment of Traders Report are lopsidedly bullish.

These conditions do not presage a significant move up. Quite the contrary.

Meanwhile, the market trades heavy (trader jargon for the sense that it doesn’t want to rally). It will be said (by the bulls) that it is consolidating in order to charge North again. Hmmm…

heavy market

Maybe, but the data on the economy is beginning to implode, casting doubt on the bullshit we get from government reports:

Wholesale trade

Wholesale Sales quit “recovering” five years ago, now going negative.

baltic dry index

 The Baltic Dry Index, which measures changes in the cost to transport raw materials, has fallen below the level of thirty years ago, indicating lots of excess shipping bottoms with no goods on order for transport.

Retail Sales mom

Retail sales plunged twice as much as expected in February. Worst back-to-back drop since October 2009.

Hardly a healthy picture. The question is, will the economy catch up to a market that’s priced for perfection? Doubtful.  I’m fading that trade.





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Primer On Stock Buying

Dear Nathan,

You’d like me to help you pick a stock, and I will. But first, let me tell you what I think buying stock is about. A share of stock in a public company is like a boat. It’s a vessel we put our money in so that it will ride with the great current of the stock market.

Our goal is to benefit from owning that stock by receiving dividend income during our holding period,  and to ultimately sell for more than we paid for it. The starting place for our research is not the stock. It is  is the condition of the stock market, because if the broad market is not going up, even the best companies will have difficulty going up. And when the market gets into a big falling period-known by investors as a bear market-well, we can just about be guaranteed to lose money.

So, what is the condition of the market today? Very expensive. It has been going up a long time and has been pushed up way beyond the value in relation to the ability of the underlying economy to produce the earnings necessary to sustain your stock. Take a look:

Stocks today

What’s more, the economy is starting to go down, so it won’t be long before the market comes down, too. That’s the way I see it, anyway, and, for various reasons, the orange line at the right of the chart is the trajectory I’m projecting for the market. In sum, let’s look at a stock to buy, but let’s plan on waiting until the market comes down and offers us a good chance to make money.

I believe you said you’d like to buy Apple. It’s a heck of a company, but it has a flaw: it is the most popular stock in the world today. More people and more institutions own Apple than any other stock. The problem, Nathan, is who’s left to buy it? You might just be the last guy aboard.

The time to have bought Apple was before they developed the iPod, the iPad, and the iPhone. The stock has gone up 10,000 percent since it came out with these wonderful things. Can they do this again? I don’t know, but technology companies usually have one exciting period, and then a new technology replaces them while they are struggling to hold on to what they’ve got:


Apple today

As you can see, Apple’s not cheap. I don’t know if the bloom is off the rose with it, but I have lost more money buying popular stocks than I like to think about.

I would rather have you look at a more basic industry, one with a good reason to have growing business in their products for many years to come. I’m thinking of Gardner Denver, manufacturer of industrial products with businesses the world over. To me, the interesting thing about GDI is that two thirds of the world is emerging from the backwaters to a modern economy.

Ironically, the fact that so many of these people already have cel phones, computers and social media devices (very easy to install internet and satellite communications in Tibet, or Gabon, or Nigeria, etc.) makes them eager to modernize, and to do that they need infrastructure and industrial development. Gardner Denver and other companies in the field would be worth looking at. They are not cheap today, of course, but, when the market comes down, I expect them to  be good long term investments–maybe pay for your college. So, let’s do a little research in those areas. I’ll be in touch as we go along. No rush, though, you don’t want to be loading your boat at a time like this:

After 165 years, a new company to operate Niagara Falls boat tours

My feeling is that anyone buying stock today is as likely to make any money in the next few years as the folks in this boat are apt to make it up Niagara Falls:

Talk to you soon,


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Oil: Deflation’s Leading Edge

The sun goes up and goes down. A success
without any enhancement whatsoever.


Dear Maridel, Dave, Jack and Martha,

Mind your businesses, now, deflation is coming. We haven’t seen this in any meaningful way during my 76 years on this earth, but it stands to be a lulu, and getting through it will require that we get our costs down to maybe half of what they are now, no matter how prudent we may have been.

You’re busy with your lives, so you may not see it coming. Google “Williston, ND oil bust” for a preview. A collapse in the oil patch tends to lead the rest of the economy. The 1980-82 crash in oil ($42 a barrel down to $8) preceded the worst recession since the depression.

The difference between now and ’82 is the amount of debt in the global financial system. It is much greater and involves billions more people than 30 years ago. Every nation is borrowed to unprecedented levels in relation to GDP. Deflation is the final chapter in an economic expansion that was  financed with borrowed money.

Borrowed money financed extreme speculation in commodities during the first decade of the new millennium. The story-there is always a story-was that China, Brazil, India and Russia were exploding, economically. Well, they were–on borrowed money. Now China has too many unsold, unoccupied buildings, Russia doesn’t have anything because it is a kleptocracy and the wealth that came from high energy prices wound up in the Swiss and Cypriot bank accounts of Putin’s henchmen, and both Brazil and India have corruption, with assets being diverted to the powerful.

The result is an extreme excess of production in the world and a collapse in every currency against the dollar. To try to keep things going, the commodity producing nations are shipping as much as they can to whoever they can foist it on at any price. China is shipping tons of steel to the U.S., putting a hurt on the American steel industry, and so it goes.

Meanwhile, debt laden consumers in the U.S. and elsewhere are raising their savings rates, not spending. The increase in spendable income from a big drop in gas prices has not resulted in an increase in spending. By year’s end, retail businesses in your town will start feeling this. Outside of the now collapsing oil industry, the biggest growth in employment in recent years has been in the restaurant industry. That’s over, eating out is peaking now and I’d hate to own a restaurant.

The rise in the stock market over the last couple of years is unwarranted, based on the underlying company values. As I’ve said in earlier posts, there are three sources of the flow of funds:

1) Highly leveraged speculation by hedge funds- guys that trade OPM (Other People’s Money), much of it belonging to pension funds desperate to get returns to provide promised benefits. The hedge fund guys extract big fees and have no skin in the game themselves.

2) Share buy-backs by corporations, also with borrowed money, serving to keep the price going up so that the senior suits can exercise outrageous stock option packages.And,

3) Clueless 401k investors, advised by agents also have no skin the game.

The game is being played by sociopaths and pathetic neophytes. If you own any stocks, be sure to put stop losses under your positions.

I’m looking forward to seeing some of you for dinner on Easter Sunday.



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Wishes Granted…Unfortunately

El clavo que sobresale siempre recibe un martillazo
(The nail that sticks out always gets hit by a hammer)

It will be said that the historic disparity between the real economy, which is slipping fast, and the fantastically expensive market, is the Fed’s fault. Would that it were true. We could have run the suits out of the country long ago,  letting reality prevail, causing a small market adjustment instead of facing an inevitable ferocious crash. Trouble is, it’s our fault. We the people asked for it. No market hiccups, please. Find a way to keep it going, we say.

Makes me think of the demand a newly retired lady recently made of her advisor: “I spent a lifetime eating hamburger, young man. Now I want you to see to it that I eat steak!”

Sure. The advisor is stuck with what the market will give him. The Fed, on the other hand, can print money. So, the advisor and his client may bitch about money printing, but anything that might cause a pause in the elevation of the lady’s retirement account is unacceptable. Fed members are bureaucrats. They like their jobs. No way are they going to piss this lady off, so they print money and hold interest rates down in order to pump up the economy.

But the exercise fails because demand is weak. You can’t get people to buy if they don’t feel they can. Consumers are loaded with debt, fatigued, and, per the polls, glum about the future. Jobs that pay a living wage are not available, and they know it.

So, instead of boosting economic activity, which could improve corporate earnings, producing tangible, lasting growth for the market, the cheap money is being borrowed by corporate America so that Corporate CEOs, in an audacious act of self dealing, can have the company buy back stock at expensive prices in order to keep the move going and be able to exercise their stock options profitably.

Nothing new about this ruse. It produces a bounce for a year or two, but eventually the real economy weighs too heavily, and a crash follows. The CEOs retire to their homes in the Hamptons and unwitting retirees and 401k investors get squadoosh.

S&P companies have spent more than $2 trillion on buybacks since 2009. By any measure, this is a mania, which has now gone stratospheric, with announced buybacks of $104.3 billion in planned purchases in February, running at almost twice the $55 billion bought a year earlier (TrimTabs Investment Research) and an average of more than $5 billion of buybacks each day.

Eventually, buybacks will reveal the reality: companies cannot find ways to invest in their companies to produce significant profits. That’s when the real economy puts the kibosh on the market.

 Apple, by the way, is the winner in the buyback sweepstakes. It is true that they have been extremely profitable, but I fail to see the value of borrowing money to buy their own expensive stock.

The FOMC gave the market some comfort a couple of hours ago. Using her typical bureaucratspeak, Fed Chairperson Janet Yellen gave assurances that she wasn’t going to not raise rates unless she maybe had to, and even then, she might, or might not.

The retired lady and her advisor can rest easy for another month. And that is what she and every other investor wants, even if it’s phony. So, don’t blame the Fed members for wanting to keep their jobs.



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Fat Cats in Togas

           An excerpt from:

The Annals of Imperial Rome

Tacitus, 59-150 A.D.

Accusers were now intensely active. Their present targets were men who enriched themselves by usury, infringing laws by which the dictator Julius Caesar had controlled loans and land-ownership in Italy. Since patriotism comes second to private profits, this law had long been ignored. Money-lending is an ancient problem in Rome, and a frequent cause of disharmony and disorder. Even in an earlier, less corrupt society steps had been taken against it. At first, interest had been determined arbitrarily by the rich, but then the Twelve Tables had fixed the maximum at 10 per cent. Next, a tribune’s law had halved the rate. Finally loans on compound interest were forbidden completely. Fraudulence, attacked by repeated legislation, was ingeniously revived after each successive counter-measure. Now, however, the praetor Sempronius Gracchus, responsible for the investigation, was compelled by the numbers of potential defendants to refer the matter to the senate. That body – being implicated to a man – nervously entreated the emperor’s indulgence. It was granted. Eighteen months were allowed in which all private finances had to be brought into line with the law. The result was a shortage of money. For all debts were called in simultaneously, and the numerous convictions and sales of confiscated property had concentrated currency in the Treasury and its imperially controlled branches. To meet this situation the senate had instructed that creditors should invest two-thirds of their capital in Italy, and debtors immediately pay the same proportion of their debts. However, creditors demanded payment in full, and debtors were morally bound to respond. The first results were importunate appeals to money-lenders. Next, the praetors’ court resounded with activity. The decree requiring land purchase and sales, envisaged as relief, had the opposite effect since when the capitalists received payment they hoarded it, to buy land at their convenience. These extensive transactions reduced prices. but large-scale debtors found it difficult to sell; so many of them were ejected from their properties, and lost not only their estates but their rank and reputation. Then Tiberius came to the rescue. He distributed a hundred million sesterces among specially established banks, for interest-free three year state loans, against security of double the value in landed property. Credit was thus restored; and gradually private lenders, too, reappeared. However, land transactions failed to adhere to the provisions of the senatorial decree. As usual, the beginning was strict, the sequel slack.

Note that even the 1 percenters got cleaned out. Swap Tarentum wool togas for Brooks Brothers suits, and here we go again.

Cheers, Rod


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Meditation on Why We Buy

“I wish to have certainty in my life,
and outcomes in the timeframe of my choice,” She said.
Too bad 

Had the stock market been rib eye steak in 1974, grocery shoppers would have been all over it. It was selling for half the price of twelve years prior, and investors were not only not buying, they were dumping stocks at wholesale. Now, forty years later, with the market up big, extremely expensive, and far outrunning the growth in the underlying company earnings, they can’t get enough of the stuff.

A cursory look at the chart below should make the reader want answers to two questions:

1) Why is it that investors never buy cheap and always buy expensive?

2) Why must there be a bear market that erases all the gains of the last forty years.

Fed Fed

The Investor Behavior Problem

Shopping for stocks is different from shopping for socks. Socks are utilitarian, we get them at the best price we can–preferably on sale. Stocks are a bet on the future, which is uncertain, so we need to feel confident that the future is good. Without knowledge of the future, we default to the past. When stocks have been falling, we feel bad, so we hold off. When stocks have been going up, we feel good, so we are willing to buy.

At the end of a long decline, the mood is very negative and most are unwilling, at the optimal time, to bet on the future. As the market rises in a new bull phase, it gets easier to make a move. At tops, people who have not been involved at all will buy without even investigating. They are the ones who drive valuations to excess. They are the ones most vulnerable.

Buying at the bottom, or soon thereafter, requires retraining our brains to want to buy in the midst of fear. Very difficult.

Why Stocks Crash

 The stock market is driven by the regret of the naïve investor, who buys from the savvy investor at tops, regretting that he didn’t get in years ago, and finally sells out at the bottom (to the savvy investor), regretting that he held on, instead of selling out a lot sooner. If we didn’t have naïve investors, we wouldn’t have bull and bear markets. Savvy investors do not account for foolish rallies.

This process is in play at all degrees of trend, from day trading up to multi-year moves. The bear phases, or corrections, are always occurring because the emotions of the regrettors are hard wired. Can’t change our feelings.

Then we have epic advances–bull markets that last for decades. The naiveté simply expands and induces ever greater disregard for reality. Plus, and this is a biggie, a lot of it is done with borrowed money. Never in the history of markets has there been so little equity and so much debt in the stock market as there is now:


There is even more borrowing than during the Tech Bubble. Not only that, but the underlying economy, supposedly the reason we buy stocks, is also more highly leveraged than ever:

US debt worse than 1929

Debt is an essential element in economic development–until servicing the borrowings stymies growth. And every fifty years or so we realize that an ordinary advance morphed into a mania. That is when we need to read Leviticus, and Tacitus, and De La Vega, and Mackay: All of the investment manias in recorded history have been fully retraced.

So, are we closer to the top or the bottom? You decide.



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Out of Left Field

 For every subtle and complicated question,
there is a perfectly simple and straightforward answer,
which is wrong

—H.L. Mencken

Cindy and I did our best. We tried to do our part to consume our fair share of gasoline to keep the only growing sector of the U.S. economy afloat. But in the end, it was too much of a hassle to keep two cars, ages 11 and 17, on the road. In the last six months we traded two vehicles getting 19 mpg for a pair that average 32 mpg. So we will use 534 fewer gallons of gas this year than last. We feel bad about this.

Since the average age of cars on the road today is ten years, it’s just a matter of time before the American auto fleet turns over, unpatriotically reducing its consumption of gas by 40%. This is calamitous! Fracking for oil has been the only bright spot in the U.S. employment picture:

employees by industry 2003-2014

But if you listen carefully, you can hear the death knell in that business. Fracking is an expensive way to extract oil. The frackers got really busy when speculators in the futures market drove the price to $140 in 2008. Since then, the commodity bubble burst and oil is down to $50 (probably headed further south), and the frickin’ frackers are in a world of hurt because they need $100 oil to be profitable.

At the present price of West Texas Intermediate, producers can’t afford to drill because bankers, observing the sudden rise of bankruptcies in the industry, have quit making loans in the oil patch (they’re no fools). So rig counts are collapsing and employment is cratering (something the government conveniently failed to include in this month’s employment report, by the way), and producers are having to pump the hell out of existing wells, selling product at a loss just to pay off their existing loans.

Rig counts are collapsing, but oil inventories are climbing:

oil rig count 

Because consumption is falling off a cliff:

oil consumption recent

So, when that blond lady in the black pantsuit strides across your flatscreen, confidently informing you that a new age of energy independence for the U.S. is at hand, she may be right. But not because the fracking industry will secure it. The source looks to be a massive disruption in all forms of energy use. And, as Cindy and I have just discovered, the automobile industry is a major disrupter.

Today, the economy is, in most sectors, just barely keeping its head out of water. Autos are the exception, having nearly recovered their losses from the Great Recession:

auto salesFor good reason. The engineering advances of autos being produced today are amazing. Fuel efficiency has dramatically improved in the last decade, and maintenance costs are down. Oil changes are now recommended at 10,000 miles, instead of the older, 3,000 mile schedule, dropping lubricant use in new vehicles by over two thirds.

As an added benefit, our insurance premiums went down as soon as we traded, something we did not expect. New cars have more safety engineering than ever, and insurers recognize it with lower premiums on new cars.

What to make of the situation?

The drop in oil prices is likely to persist, which means a big rise in unemployment in the oil patch. But the elimination of a big chunk of the use of hydrocarbons is great for the environment.

So far, there is no evidence that consumers are spending more on general consumption as a result of lower gas prices, so no net improvement in the economy–except for auto sales.

The increase in fuel efficiency and safety in new cars is a powerful good, unless you’re a mechanic. Your shop will get one visit a year from your customers instead of three.

So, with apologies to your friend in the service department, go get a new car. Nothing like the new car smell to improve your sense of well being on the way to work in the morning.



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Wanted: Uncommon Sense

We must learn to differentiate clearly
the fundamentally important, that
which is really basic, from that which
is dispensable, and turn aside from
everything else,  from the multitude of
things that clutter up the mind and
divert it from the essential.

–Albert Einstein

Walk into a bank or broker’s office today and ask them what you should do with your money. They will tell you to buy stock. Ask them why, they will say that is what their research analysts recommend. Ask them why, and they will cite one or more investment hypotheses: The Dividend Discount Model, The Efficient Market Hypothesis, Economic Forecasts, Sun Spots (you’d be surprised.)

All very well, but given the uncertainty of stock market returns, my view is to apply The Occam’s Razor Hypothesis, which says that, when considering  competing hypotheses for solving a problem, the one with the fewest assumptions should be selected. I select Buy-Them-When-Nobody-Wants-Them. It’s the simplest solution, requiring only mindfulness and patience.

I was reminded of this last week. My pal, Bob was on a business trip to the West Coast. Scheduled to fly home from L. A., he hopped over to Las Vegas instead, bought a car and drove the rest of the way. I wondered why he bought the vehicle in Vegas.

“I’d been thinking about hybrids, so I went into a Ford dealer in L. A. and test drove a C-Max. Nice car, listed for $37,000. I figured, with the price of gas cut in half now, the aftermarket in hybrids might be soft. So I went online and found this one, less than a year old, for $14,500. Sweet ride!”

Turns out, Bob has been doing this sort of thing nearly all his life. “When I was a kid, I couldn’t wait to get up in the morning and run outside to see what I could find. ”

His first venture into buying unloved objects for resale was when he owned a motorcycle shop. he could sell a new bike and make 20%, but if he bought an old relic bike in salvage for a hundred dollars or so, he would have it  in the shop until a collector came along to happily take it off his hands for a thousand bucks.

While driving home from Vegas, he was chatting with an old friend about his purchase. “Knowing you, you might have it sold before you get home,” his friend said. “Never know,” he replied. I’ve known Bob for a couple of years and he’s had three cars and two motorcycles in that time span.

Whether you’re trading stocks, motorcycles or baseball cards, the key is to buy right. You don’t know what you’ll make, but if you pay attention and get the stuff for the right price, you’ve got a good chance of coming out ahead.

Carlos Helu Slim is, depending on the month, either one two or three in the list of the world’s richest men. Slim is a Mexican businessman who got rich buying great companies when the Mexican stock market was in turmoil. He learned to do this watching his father pick off properties during market panics. “Buying is a discipline,” said Slim in a recent interview. “You have to do your homework, and then wait, years if necessary, for periods of severe stress in the economy and the markets. You buy when good companies are being tossed on the garbage heap by fearful investors.”

Both of these men, Bob and Mr. Slim, have the passion, talent and experience to excel at trading the things they trade. The average 401k investor trying to build a retirement does not. And, without it, he cant buy right. On the advice of a bank or broker, he lets his money slide willy-nilly into overpriced stock funds, blissfully unaware that many of the funds’ companies are run by sociopaths who extract outrageous compensation and rig the finances of the enterprise to benefit senior management rather than the shareholder, a strategy that inevitably leads to collapse.

Most 401k investors are doomed to get the picture after their account is down big. They’ll hold on until the pain is unbearable, and sell about the time Mr. Slim is buying.

The wiser man would be patiently parked in money market funds until all hope in the markets is lost. Or, forget about stocks and do something like ladder two, four and ten year Treasury Notes. That way they can sleep soundly next time Wall Street is the scene of financial carnage.



No one should consider any part of this presentation as a recommendation to buy or sell any securities whatsoever.



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