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  • Just because you’re impressed because someone in the financial industry says something that you don’t understand is not a reason to believe that they understand it either. This industry overflows with half-baked theories whose only practical use is to impress the public.

  • A sound monetary system is the cornerstone of a long-lasting economy. Not only is it the cornerstone, it is also the foundation on which a sustainable healthy social and political system must be established or else both will eventually fail as they always have in the past. As it has always turned out in a democracy, the United States’ once sound monetary system was sacrificed on the altar of political expediency.

  • Going into debt seems like a positive thing at times if one ignores the bondage which repayment requires. In essence, individuals should look at creating personal debt as being like selling one’s self into slavery simply because slavery promises free room and board.

  • When confronting economic setbacks, it is well to recall that the first stage of grief tends to be denial and the last stage acceptance. Those who prosper tend to not deny and go directly to acceptance and make the most of what has happened. Those who fail tend to remain locked in the prison of denial until it is too late.

  • As always, our emotions are our main enemies in investing. When the market is soaring, we tend to ignore risk; and when the market is sinking we tend to ignore opportunity. Ideally, risk and opportunity should be balanced equally in our thoughts whether markets are soaring or sinking.

  • The credit crisis of the early 21st Century occurred in large part by the collapse of financial instruments called derivatives. However, the derivatives were, in effect, like spider webs prepared to snare the unwary; however, just like a spider web, if too many are snared, the web will no longer support the once unwary and the web collapses, taking the once unwary and the web-spinners, into the abyss which always awaited.

  • As a fundamental principle in investing, we should always remember that when we reward others for taking risks, they will take risks; and the greater the reward, the greater will be the risks which they will be willing to take. This is almost always what happens when an economy collapses.

  • To try to succeed in the stock market in the short-term is to try to do so where the competition is most intense. By buying stocks whose gains should be large in ten years is to invest where competition is almost nonexistent.

  • We often wonder why so many people seek fortunes well beyond what they will ever need. This quest has nothing to do with need. What people seek is power. The quest for power is insatiable and therefore the quest for the power which money provides can not be satisfied.

  • When an investor ignores the real rate of inflation, failure or disappointment is sure to follow; for what does it profit an investor if he deceives himself but loses the buying power of his wealth?

  • Of all of the Potemkin Villages which society has built, none come close to doing the investor as much harm as the Potemkin Villages which we’ve built in our minds. These villages are built to protect us from knowing the truth about our beliefs and the beliefs held by the significant others which we tend to surround ourselves. We dare not look around the edges of the facades of these villages for the fear that we may find out that nothing is there and never was except our wanting the apparent protection which these facades provided. Although this tendency is true with most of what we believe, it is disastrously so to our finances to cling to those financial beliefs which are held without any support, which most of them are; rather we should cling to those investment methods which history has shown to be successful in the long-run. To not do so immediately puts the investor at the mercy of the “hypesters” whose aim is to pick the bones of any who will listen and follow.

  • When financial interests enter, objectivity flees.

  • Investors shouldn’t be alarmed about an occasional sharp decline in their investments as the only thing which reliably rises straight up is hot air, of which Wall Street has in overabundance.

  • In Greek tragedies the gods didn’t appreciate those mortals who thought themselves omnipotent. Whether or not gods need to be involved in the self-destructive tendencies of humans, suffice it to say Greek tragedies still accompany those who believe themselves highly superior to others. Somehow, humility seems to work out better, at least on average.

  • When it comes to investment advice, it is wise to recognize that facts exist only in the past and the present. The future provides no facts until it mutates into the present. Thus it is always prudent to remember the old saying: “Where facts are few, experts are many.” When it comes to the future, facts are not only few, they are nonexistent. Therefore, financial experts are much more than many.

  • When market gurus want to sell you their advice, remember, with them it’s never too late to predict the past.

  • To understand the general mood of the market all that we need do is look within ourselves. In general the investor would do best by doing the opposite of what their guts tell them to do.

  • Few things are as corrupting as receiving sudden wealth.


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