What Price Glory - or, Buy While It Lasts

People who should know better, are starting to get excited about buying common stocks before it's too late.

Too late for what?

Well, the answer is, before they "really start going up." Of course they think markets will probably go down again. But for the long term, they say, it's better to get invested now before it's too late.

Guido is sure some people thought this way during the 1930s depression, the whole decade long. As the decade ended, he'd guess they became fewer in number. Basically, if I recall, the ones that got stuck in 1933, didn't recover their investment until the mid 1950s. If I remember correctly, this is without factoring in inflation, which would probably mean breaking even some time in the 1960s, on a price adjusted basis. Gee, just about the time stock markets peaked, before they crashed again approximately  50% in the early 1970s.

Some, again who should know better, are even advising the purchase of high tech stocks as a "once in a time" opportunity.

As was mentioned in two other articles on this website < Grand Expectations  and All Things to All Souls >, the immediate future of tech companies does not look bright. In fact it could be terrible. All the current  hype is only forecasts and "estimated" revenues / earnings, not actual profits < as pointed out in Lets Pretend and Tale of the Bull, also on this site. >.

Besides,  investing long term in almost all  tech companies is like buying this years' dress, and thinking it will still be in fashion 10 years later. Do any of you young ladies want to wear your mothers' old clothes? Or for that matter is it even socially feasible?

One should always think of the vast spectrum of investment opportunities out there in the financial markets. There is always something that's a good bet. One is not only restricted to the stock markets. You have to think outside the box, at the wide array of possibilities.

Now having said this, Guido must confess he is nonplussed about what good opportunities exist in all these markets. Much, like many commodities, has been unreasonably inflated, due to the leverage from all the money that Bernanke and other Central Bankers have tossed out there.

As mentioned in a few articles, Guido does own a material percentage of gold. But the gold market has no rational basis for being this high. There's not any logical reason to own it. Except the fact that the world monetary system is not stable. < Oh my, isn't that a big surprise. >

Bond markets may have reached a ceiling, and besides, even government bonds < US > have a risk factor that was nonexistent only a few years ago.

What about owning your own house without a mortgage? Or for that matter several properties without debt? Well, just make sure you can pay the real estate  taxes if we have a hyperinflation, or for that matter even if we don't. < "Four hundred dollars for the taxes on Terra," Scarlett wailed. " It might as well be four million."  I am sure many in the depression appreciated that quote from GWTW. >

This is a very difficult, in the fact the most difficult,  time to decide what to do. When the storm breaks, things are going to move very quickly.

Wait and watch vigilantly. Be prepared to move fast. < I am only saying what Guido will do. This is not a suggestion or otherwise advice for others. Each person has their own inner direction. >

"What makes the desert beautiful is that somewhere it hides a well." - Saint-Exupery

< As always, this article is for information purposes only. It is not intended as advice or in any  way making any recommendations. >