Tuesday, August 09, 2016

The Great Depression 2006 vs Doom and Gloom

I've been writing this blog for quite a while. People in the remarks section tend to think that I am hunkered down in a basement investing in nothing, while waiting for the Great Depression to pass and then make a killing.

If that is what you think, you are sadly mistaken. This blog is about pointing out the misinformation out there. Especially from government. There was no great recession of 2007 until just recently, Obama verified it, 9 years after the fact.

If you can comprehend that we are in a Great Depression, we have the financial information to make a killing. We have some stocks paying over 4 percent dividends. We have rental real estate in some parts of the country that will return 20% with a lot of hard work. Precious metals are a good place to park spare cash. The investor can make just as much money in a rising stock market as in a falling one. The trouble is, it is against human nature to short a stock.

There are stock and bond options out there that are thinly traded. A $100 option contract in the last crash on October 20 1987 returned $86,000. I was greedy and had to settle for $43,000 two days later. You have to purchase options when nobody thinks it has a snowballs chance in hell, that is when the price is right. If I was to tell another person my option strategy, it would double my cost of options. Most options expire worthless, so I don’t need to throw away twice as much money for being your friend. The real key is to establish a position in good times waiting for the inevitable.

The only real place my wife and I have stopped investing in, is the Treasury Bill market. We use to make $10,000 a year on rolling over 3-month T-Bills. Why would you give our government $140k and savor your chops over $700 in interest income? I don’t know anyone who is dumb enough to invest in Treasuries, but whoever they are, they deserve to lose every penny invested. The thing that bothers me on this point, is that I don’t think I have ever met anyone that stupid. The government is covering something up here. Of course we could call it the greatest robbery of the elderly's interest savings to have every been conceived.

So what do we have here? A Great Depression. Am I in a hole waiting for it to blow over? Hell no. If you know where you are, financially, you have options; if you don’t know where you are at, you have none.

Is this blog about doom and gloom? My answer, no. It’s about knowing what is happening and making money off of it. Money is a tool, used wisely, you can carpenter many things. The real question that time will tell, are you a good carpenter? May you have the time to become a good one, remember that experience is not a one day class,.


Anonymous said...

you hit the nail on the head but also, ignored the biggest challenge, timing!

we all know the truck is leaking oil but none of us know when the engine will be empty and cease-up, or do you know? please share, thanks

p.s. time costs money


Jim in San Marcos said...


It's not so much timing as the age of the investor. As you grow older your investment perspective changes. You wish you had done what you didn't.

If your young, invest in rental real estate. A down payment to purchase a home in San Diego, could buy two rentals on the East coast. When paid off, they would cover your rent for the rest of your life, where ever you want to live.

Of course the reality is, at age 20 you want a flashy car and all the Bling you can buy.

Your biggest goals in life should be a job you enjoy and a companion to share your spare time with. Your wealth is the tool set to pass on to your kids.