Thursday, December 22, 2005

Listen to the guy with the bigger pile

Back in the days when we were licensed and happily marketing insurance and investments, a great premium was placed on continuing education of various kinds, especially in leadership skills and developing the ability to recognize trends. Our mantra was simple: when in doubt as to whose voice one should pay attention, choose the guy with the bigger pile. Pile of earnings and assets, legitimately self-made. (Inherited wealth, on the other hand, was a worthless indicator.)

We are just as happy today being out of the marketing of investment advice, but that does not mean that we do not pay careful attention to the voices around us. We are interested in a good spiritual life, a good family life (which usually but not necessarily follows with it), and the ability to keep these two wonderful things intact no matter what else happens in the world.

Some of the voices of the past no longer sound credible. The people who are preaching the ever-upward spiral of stock investments have got a six-year "blip" to contend with. At this point the blip is becoming a blob that is not easily explained by conventional economic theory. The dot-com collapse caught people by surprise (in retrospect should not have) but 9/11 really kicked a hole in the bucket since an event of that type cannot be predicted in advance, and its effects are also not foreseeable. This year we've seen the tsunami and fleet (or is it flock) of damaging hurricanes that have ongoing effects, mostly negative.

Markets revolve around supply and demand, currency values (such things as inflation and deflation, interest rates and currency-to-currency ratios) and, not the least of things, consumer or citizen confidence.

It is the last item, confidence, that is the wild card in trying to determine where things are heading. Loss of confidence can kill an economic recovery. What causes loss of confidence? Bad news. But sometimes it's just the thought, expressed by many people, that bad news is coming. In other words, mere forboding can create a lack of confidence. Maybe it's better not to mention some of the trends that are taking place. It could make things worse.

On the other hand, people deserve an opportunity to anticipate and prepare for bad things. Even bad things that might NOT take place. In other words, people should be encouraged to prepare for the worst, and always hope for the best.

It's a little easier if you are a person of faith: that is, you have a belief system that encourages hope no matter how bad things get in your life. We can't begin to imagine how sad it would be to have no strong faith life, considering the political, geological and economic portents of the times.

Which gets us, finally, to what we wanted to recommend to you today. An article on a billionaire who quite frankly is a member of the "doom and gloom" club. Whether he has a good faith life or not we cannot say, for the article doesn't really get into that aspect of his life. But what he's worried about, we believe, has ramifications that ought to interest you as well.

And he certainly is one of those with a bigger pile.

His name is Richard Rainwater, and the article is at And without wishing him any ill will whatsoever, we hope his investments this next year go totally awry. That will mean that his pessimism is misplaced, at least for the moment.


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