If you have not already done so, you may wish to read the
Introduction to Gnomica.
Wednesday 8 August 2012
Read gnomica 1-50 here!
“Sometimes your best investments are the ones you don’t make.”
Donald Trump (14 Jun 1946 – )
This flamboyant ‘celebrity’ offers excellent advice here, and I give him high marks — not only for that but also for the clever paraprosdokian.
Investing in stocks is more than a long-term buy-and-hold strategy or an hour-by-hour trading-in-and-out or a plunging into a position in the latest ‘sure thing’ some of course entirely disinterested flack flogs in the financial press or touts on a television stock-market show — and then just sitting back and counting the profits as they roll in.
No, I think that’s a good way to go broke in both the slow lane and the fast one.
Here I am definitely not offering investment advice (I’m not licensed!), just musing ‘aloud’. Frankly, making money in stocks is in my decided opinion largely a matter of the happy combination of luck and caution, an aleatory but — even so — not entirely random proposition.
When the market froths with excitement (remember what’s-his-name and his “irrational exuberance”) everybody wants to jump into the deep churning waters, as was the case in the late nineties/early 2000 and again around 2007-2008 as well as other ‘bumper seasons’? The wisest protocol a lot of people should have followed in those contagiously delusional days would surely have been, as Trump notes, to make no investments at all.
How do you think people feel today who back in the day bought-and-held Chinese darlings-of-the-day SINA or SOHU around February or March of last year? and a sure-bet-thing NBG (National Bank of Greece!!) at the very start of 2008? or GE in late 2007? And where are all the avaricious automata who plunged into NOK back in early 2000?
What happened to all that invested money?
Do you think these heroes would have been wise to make no investment at all?
Do you agree that sometimes the most potent action is inaction?
Do you opine that sometimes the smartest thing you can say is nothing?
And so on and so forth and so on and lots of luck to you out there among the socialist and communist beasts rending and roaring and roaming in the financial jungles of Western capitalism!