Life is a series of
fortunate events. I recall, when I was much
younger, asking a friend how he was doing. Without much hesitation, he said: “I’m
alive.” In response I asked him what was
so great about that. Once more, without much faltering, he replied with “Well… consider
the alternative!” Rehearsed and
practiced? Maybe, but yet an effective
response to light social, every-day bantering.
What’s your
thing? No-one is right all the
time. We see it when we watch the
talking heads on TV offering their qualified opinions on everything from the debt
ceiling, to Obamacare, to stocks that one should be buying (or not), and more. In fact, there’s a good chance that these
pundits and experts are wrong at least 50% of the time, given that the
market goes up and down, the U.S. political environment is split 50/50 between two hopelessly inefficient
political parties, etc.
Just last week I
posted a rant
on this blog site. I included this prediction:
“…the Oracle-sponsored
America’s Cup Grand Prix boat, valued at around $10 million, is about to lose
the final to New Zealand.” I was wrong.
At the time of my prediction, NZ was leading 8-1 in the America’s
Cup final, needing to win just one more race to take the Loius Vuitton Cup.
My prediction was a sure
thing, mathematical odds stacked heavily in my favor.
I lost. I’m happy I lost that
call. I’m long $ORCL, and my LT position
is in the money. For this last reason I may
view as favorable, anything positive that Oracle does, within reason, at
whatever cost they deem affordable!
If the talking heads
win/loss ratio were unfavorable beyond 50/50, they would be limited to perhaps considering careers
in politics, meteorology... or perhaps they could become economists? I can’t think of other careers where you can
be wrong most of the time, and still keep your job. Doctors?
I don’t think so.
What’s with
Obamacare anyway? How did seemingly
smart people screw up so badly? Maybe it
started with Pelosi saying “we have to vote for it so that we can see what’s in
it.” It is possible that the original bill – now law
– contained much good stuff and intent, but what a screw-up by the elected leaders in packaging and positioning a
piece of legislation that they neither understood, nor read!
And what’s up with
Pelosi anyway? According to Politico, she
decided not to turn up for the Continuing
Resolution (CR) vote on the debt ceiling.
A matter as trivial as deciding whether to shut down the American
government: “Speaker Boehner has told me
he has the votes for his proposals on his side of the aisle and that he will
not need our help,” Pelosi wrote in a letter to colleagues.
Maybe you think I’m biased,
unfairly targeting vitriol at one Democrat only? I’m not.
The Republicans and the rest of the Democrats are collectively so inept, I
just couldn’t decide on only another one or two people to aim my rancor at!
What I do know for
sure, is that our elected leaders are negatively impacting my investments. This is a result of the ongoing debt ceiling
debate, the cost of Obamacare to the economy, uninhibited Federal spending, a
money-printing Federal Reserve buying back government securities to artificially
impact capital and monetary valuations globally, etc.
Remember “buy and
hold?” Today, it’s buy and sold,
especially if you have stops plugged in to mitigate financial losses as the
market volatility spins anyone dizzy!
Here’s my new
prediction: This government induced,
ongoing mismanagement is the new normal, so get used to it. From one crisis to another! And it’s not limited to the U.S. Oh no, the current shenanigans in Italy, in addition
to near-bankruptcy of countries like Portugal, Ireland, Greece and Spain (PIGS) will
be with us, for most of our current generation.
Emerging
markets?
The so-called BRIC
(Brazil, Russia, India and China) countries are intellectually and morally corrupt. Not the people - they're nice - just most of their
politicians. I used to do much business
with China... well, actually Taiwan, before the feud about whether Taiwanese
people were actually Chinese, or not. These are
countries where employees are rewarded for making excellent quality copies of
other products. Today, they simply copy
financial statements and (other vague, subject to interpretation) Western economic metrics, when they share
information that you may base your investment decisions on.
If you want to
invest in an emerging market, and mitigate investment-loss risk, invest in
global corporations that do business in these countries, and in all others
around the world. That’s a form of
diversification. For example, rather
than investing in PetroChina ($PTR), you may consider investing in Exxon Mobil ($XOM). Or how about Coco-Cola ($KO) or Boeing
($BA). You just can’t beat 100+ years of
solid growth, especially with reinvested dividends! Some of these are not great investments in terms of returns (i.e. you could do better elsewhere), but they're relatively low risk and safer investments, offering nice dividend yields.
Unfortunately,
you simply have to pay attention to your investments. Don’t settle for under-performing mutual
funds, or even ETF investments that collectively under-perform the S&P or
Dow.
You owe it to yourself and your
family to match or beat the general market performance… so get cracking, and best of
success!
Disclosure: long $ORCL $BA
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