IN⋅VEST⋅MENT [in-vest-muhnt] –noun
"An investment is the choice by the individual to risk his savings with the hope of gain."
"An asset is usually purchased, or equivalently a deposit is made in a bank, in "hopes" of getting a future return or interest from it."
"The word originates in the Latin "vestis", meaning garment, and refers to the act of putting things (money or other claims to resources) into others' pockets."
It is an asset that is expected to give returns without any work on the asset per se.
I couldn’t/don't believe my eyes when I read the actual definition of "investing"!!! it appears if you are blind, deaf and dumb you are extra qualified!!!
It literally says that you are to take financial "risk" with "hope” as a strategy and do zero "work" with regards. Seriously how can that be a plan for success? What about the "No free lunch rule" or "the harder I work the more I make" or all other true axioms?
Its is this attitude that will greatly lower the quality of life for people globally.
Here’s the truth, as much as you guys are sick of hearing it, I can’t help it… I am really trying to save those of you that still have a chance from allowing history to repeat itself.
There have been decades of fraudulent accounting, reporting fake gains, using “survivorship bias” (only reporting the results of surviving companies, and erasing the results of those no longer with us) .. I would have been a straight A student if we threw out my F’s, D’s, and C’s.
Besides there being NO controls in place to protect the "investor’s" money from PURE fraud… none, zero, zilch, nada…
Wall Street has for decades treated your money like its own piggy bank to use leverage upon leverage to generate fake returns for themselves to hold out how smart they were so you should come along?. They leverage it out 10:1 and take Huge gambles with YOUR money and then, continually churned you in and out of positions for HUGE fees, and then court you to keep the money in their piggy bank year after year. They say "Hey, you’re a smart guy, think long term, in the long haul stocks are great!, "look at this fake chart", "look at our companies earning!" "why would we steer you wrong?", "you don't lose if you don't sell" etc… they don't mention only 6 of the Dow 30 are up over the last DECADE!!!
They lied; your best interests were dead last in a long chain of interests none of them yours... Long Term "buy and hold" doesn’t work, equities don’t work, unless you’re one of the very few that magically bubble-jumped tech, dot com, banking, or energy booms and hit near perfect entry and exits. The "Oracle" Warren Buffett "king of the shills" now has told everyone “this is a great time to buy” (last quarter) then he went on to lose half his money - - NOT very "Oracally"?.
Think about this… if you were to buy the Dow 30 today and get cryogenically frozen for 30 years, you would think that you would awake a very wealthy man per Wall street's lies right? In Fantasy land maybe, but the problem with this idea is that probably not 10% of those companies will even exist in 30 years.
Are you really going to hand your remaining or future money over to the same people who LAST time leveraged/gambled your money, and re-deployed it a hundred times over with complete disregard for SAID money. The fact that these same people are DEPENDENT on your money should make you very worried about their MOTIVES... they have proved to be willing to screw you or am I lying?
When I was a player in the "Retail" game 2 decades ago ...the manager of the office(Please watch the short clip from a video of me in 1990s warning that this equities game is not safe.) I worked for told us that: “The economic function of a stock broker is to generate commissions"… I would say that this period of my career is where I truly found my conscience and began to really pursue the sterility and pre-planning entrances, exits/goals for a profit target, and "stop losses" to contain risk.
In all the years I worked in these firms I NEVER saw money made by "investing", only the traders made money never the investors.
Sure they - - the Investors - - were up BIG from time to time - - the dot.com era etc, but their broker always had a play for them to put that "new money" to work, they never made it to the cage to cash their chips.
Me, I decided to come up with my own ideas that I would do with my "own" money that had chance of "making money". I ate my own cooking! If I was right I got paid twice, 1 time by my account growing and 1 more time thru performance fees the clients were happy to pay. Then I decided to open a Hedge fund because I felt (pre Madoff when there were 100s not 10s of thousands of funds) at that time it was a less conflicted relationship... I put up a million of MY personal non- borrowed dollars ... I was the 1st one in the pool.
Sorry for the walk down memory lane, but I feel you must look backwards to move forwards. Here are my reasons WHY even if there is a rally in the market it wouldn’t solve/fix anything:
1. "Gambler’s Ruin" http://en.wikipedia.org/wiki/Gambler’s_ruin <http://en.wikipedia.org/wiki/Gamblerís_ruin>
A new up cycle or rally cannot replace the trillions that went up in smoke over the past two years, That money is gone! The Bear Stearns, Lehman Brothers, Countrywide, Citibank, AIG and and and (see "Moral Hazard" on the site money is gone right?) A rally won’t help those who have already gone broke will it? The game is already over for most "investors" - - see "Baby boomers" below.
2. Jobs are disappearing and fast! - There are 14 jobs lost for every job created and the quality and pay scale of those jobs is lower than the last. Basically the Ex-mortgage broker, Ex-stock broker, Ex-real-estate agent, Ex-car salesman, Ex-Microsoft employee (insert almost any industry or company name you like) now making your coffee at Star bucks (before they too go the way of Winchell’s donuts) are NOT going to buy a new Cadillac Escalade and a new overpriced house (with a fake loan) to stimulate the economy are they?
3. The baby boomers of which (I know I am redundant and repetitive on this subject!) there are 80 million in existence, 365 of them turn 62 every hour. Are they going to be able to re-build their savings?, are they going to back to work? How do they compete for jobs in this market? Are they going be able to loosen up purse strings anytime soon and spend like they once did (the "house piggy bank" with serial refinancing they were tapping is now gone too!) to keep the economy moving? Probably not. Never has this country been faced with such a bleak demographic outlook, so don’t go back to the last depression and say "gee it all worked out ok". This is completely different... at that time we were an ascending nation of young people who were fighting a real war, for a real reason and generating tons of manufacturing jobs on our soil.
4. Financial expectations have now shifted for the people with any money left to: "the return OF principal is more important than the return ON principal". The safe havens of the past are pretty much worthless… Treasuries are paying literally -0- and are now coming into (their safety) question as our trading partners may DEMAND their money back. Call me crazy, but I think it will be difficult to stimulate the economy with a zero saving rate and zero percent interest on that... where is the spending going to come from? the "stimulus package" O boy a few hundred dollars a household should do the trick! with half the money lost and with Real estate in the tank and still tanking sure...
5. Rents - we are now at a point where the "renter" has to do more due diligence on the "Landlord" than the other way around… this will provide leverage for the renter to demand lower rents as the banks end up taking back a HUGE % of the commercial real estate (lots empty already) that was over leveraged during the Greenspan created Real Estate bubble.
6. Extinction of US companies General Motors, AIG insurance , Citibank, and many other large cap companies being propped up by the US government (they should have been allowed to go bankrupt versus BAILED OUT on our dime) are vaporizing generations of wealth and creating generations/centuries of debt and in the end we will probably never get the books straight. You want to cry about Bernie Madoff? This (the US debt) is a bigger Ponzi Scheme. Finally, look at the domino effect this is causing!!! more lost jobs, lack of consumer spending, past/future real estate depreciation, equity depletion, and eventually loss of hope and then capitulation - - then the broad market will be a BUY for a time frame, but I am talking Dow 3-4000 NOT here!
7. Fake theories - MTP Modern portfolio theory and VAR have PROVEN to be complete fraud. “Buy and hold" is just a cruel joke. It should be called Loan us your Money while we buy jets, give ourselves monstrous bonuses on top of huge salaries, and throw parties while you bail us out with your tax dollars... go on internet and look at what is done with the bailout money! take your head out of sand! AIG $440,000.00 "spa day", Citi buys a $50,000,000.00 jet + spends $400,000,000.00 (not a typo) on changing the name on the NY Mets if I read this right?, Northern trust has a $36,000,000.00 golf tournament and so on ...
8. "Free-markets" are proven to be gone. The Feds Sunday night intervention of Bear Stearns was unconstitutional but hey, there was no time and it HAD to be done… Honest.
9. The FED over-reaching in scope, it’s NOT a government agency! Thomas Jefferson said over 200 years ago: "Banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and the corporations that will grow around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."
10. The "Crony Capitalism" and corruption crew has come up with a new twist to the game: all the gains were privatized (check out Paulson's tax free payday which I will do a work up on shortly on the site) and the losses are socialized with us the taxpayers getting JUST the losers.
If you ever made money in market and got out right and were rewarded for bad behavior. Write that off to an event similar to sleeping with someone who ended up (no offense to anyone HIV positive or suffering with disease simply making a point) having "AIDs" and then you get the "all clear" and then going back and have unprotected sex with the person AGAIN KNOWING they had it!
Think again, before "Investing" AND JUST THROWING YOUR MONEY AWAY...STOP listening to others and gather your own facts and make REAL rational and reasonable decisions with REAL risk and reward exceptions - it’s called WORKING it’s a very hard there are no easy ways to make an easy living - - you owe it to the money you have left!!!