a simple, bold assertion: partnering with markets is the key to consistent, easy investment gains
Imagine two groups of people: one group keeps investing in an old, familiar industry and the other group invests in a new technology. Will their investment results be exactly the same or somewhat different?
For instance, will bicycle investors perform the same a automobile industry investors? Will telegraph investors perform the same as those who invest in telephone technology or even in the radio industry?
Recall the children’s story of “The Three Little Pigs.” You were probably tucked in a warm bed looking at pictures of the different results of investing in a straw hut, a wooden shack, or even a brick mansion. Some structures collapsed from a blowing wind while only one provided secure shelter from a hungry wolf.
So, different methods clearly produce different results, right? When hurricanes and tornadoes arrive, will a house built on the sand provide the same results as a house built on the rock?
You may be wondering whether childrens’ stories and proverbs from scripture could have anything to teach us about our investment results recently and in the future. Consider that in just the next couple of minutes, we might learn something very valuable from briefly exploring the principle that different methods produce different results.
Most concisely, here is my fundamental assertion about accessing easy gains; for those who partner with markets, consistent investment gains are easy. Also, for all the rest, investing that is risky but is not recognized as risky is what provides the source of those easy gains to those who partner with markets, because so many blindly under-estimate risks that a few notice long before the mobs learn about those risks, such as from the mass media reporting one statistics that are already a month old or even an entire quarter or year out-of-date. The masses may be unpleasantly surprised because what they had believed to be safe or stable may be suddenly recognized as not currently safe or stable.
Those select few who notice changes early may prudently make practical adjustments that are insightful, brave, and of course not popular… yet. However, once those adjustments get popular, the easy gains of selective investors can be immense.
So, some humbly partner with markets, while others instead simply ignore or even violently resist market realities, discarding the simple truth of market realities and risks in favor of idolizing various ideals and ideologies in which they have been indoctrinated. They may vainly worship the guidance of commercial advertising, or of salespeople earning commissions and bearing the title of “licensed advisor” or “licensed agent,” or of the mass media’s dramatic and confusing analysis developed by only the most politically-correct economists. The masses may as well even complain forever about the unsatisfying guidance they have been following without making any personal adjustments to continuing to follow it!
Those blind speculators following the blind advisors are inevitably surprised when they recognize the reality of their speculative gambling, typically focusing desperately on the latest possible saviors as well as on any convenient excuses and targets of blame to explain how they have been victimized, rather than openly admitting that they have been negligently responsible for producing for themselves the natural results of their high-risk investing. They may as well keep putting all of their hysterical faith in partisan politicians to rescue their favorite investments from the realities of markets and economics.
But couldn’t politicians rescue the bicycle industry from the automobile industry? Could politicians rescue the tent industry from the construction industry? Could politicians rescue the firewood industry from the coal industry or the woodstove industry from the electrical stove industry? Could politicians rescue the telegraph industry from the telephone industry (or from fax machines and email)?
Or, what if we pass a pro-telegraph constitutional amendment or make a treaty with every nation in the world to only use telegraphs? Subsidies and restrictions on competition can certainly influence isolated territories, but eventually, telegraph technology simply may not compete with things like CBs and cell phones.
Politicians simply cannot rescue everyone from the progress of technological innovation. Politicians cannot rescue anyone at all from personal responsibility for diet and exercise. Politicians certainly cannot rescue everyone from the realities of geology (such as the depletion of fossil fuels like oil, coal, and natural gas and the natural consequences of such depletion).
Markets are informal collectives formed by the spontaneous actions of masses of people. Politicians cannot rescue the masses of people from the masses of people and their own actions.
You may have heard that God helps those who help themselves. Consider that God helps those who are committed to partnering.
Those who partner with markets prosper. For those who ignore or even resist the realities of market risks and opportunities (and instead stay withdrawn to read headlines and continue blindly investing in the promises of politicians and insurance companies and so on), such masses are still subject to the risks of a redistribution away from them toward those who have been insightful and brave and adaptive. In other words, different methods produce different results!
To partner with markets to access easy gains, call
407 4 EZ GAINS
(407 439 4246)
[that # is just a voice mail. You can directly reach me at 480 265 5522.]
Published on Dec. 10, 2010
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