I’m Putting My Money Where My Blog Is

May/18/2008 23:59PM
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Yesterday I met with my investment guy. This country is going to get hammered regardless of the winner in November. We will continue to face high gasoline prices, high utility bills, high food prices, and the recession will worsen due to our lack of action on all fronts. Washington is stroking us like fools. When you see they are investigating ways to change regulations for energy traders you know the paranoia is peaking. They just want you to believe they are doing something while they are doing everything they can to make it worse.They will put in the windfall profits tax on so called Big Oil. They will put in the cap and trade on CO2. All of this will raise energy bills and cut supply. There is absolutely nothing on the drawing board in Washington that will make it better.  Until we all say enough, it will go from bad to worse. 

So, you have to protect yourself. Don’t sit idly by and watch your assets decline along with your real estate values and your now worthless SUV and boat. What did I do?

First, look at what’s in the biggest trouble. Airlines, trucking companies, retail stores, financial institutions, R.V.’s, boats, the auto industry, food processors, fast food outlets, and high end discretionary spending options. Short all these or disinvest if you have them in your portfolio. They are going to be squeezed on margins or suffer from sales losses, or both.  Natural gas producers will do well. Utilities will be squeezed as costs go up ahead of rate increases. 

What should do well. Commodities. Gold, steel,coal, copper, corn, wheat, and the energy area. Companies like Deere, Archer Daniels Midland, Cargill, Dupont(seed and fertilizer), appliance manufacturers who are exporting to China and India, and other hard goods. Look at oil service companies, offshore rig leasing companies, Independent oil exploration and production companies(Apache, e.g.), coal mining companies, natural gas producers, etc. International stocks. Countries like China, India, and Brazil are growing. Be cautious here.

Bonds that are indexed to inflation should benefit from the rampant inflation we are facing. These are a safe haven.

If you make good decisions you can weather this storm. It’s even more important that you do, since Obama will try to take as much as he can  of your good fortune from making good decisions. He wants you to do well and help those who do not try or fail. Everything will cost more and it will behoove you to have as much personal wealth as you can have to try to maintain a reasonable life style. Lot’s of folks will be forced to cut all but the necessities. Others will go broke.

We are going to pay a very dear price to finance the liberal causes. Saving the world will have a big tab with little if any results. Big government will be expensive and produce nothing. The wake up call will come, but if you slept through the investment adjustments you need to make you will suffer more.

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Comments (2)

  1. Ken Dozier says:

    You are ahead of the curve and although the market has made some advances recently, hard times are ahead if you’re invested in funds that are sensitive to inflation and rising costs. I had sent my broker a note last week to rethink my portfolio and will be meeting with him this week.

    The Presidential Candidates and Congress are doing and saying nothing that would suggest any improvement in the short term. Gridlock and bad decisions are all I am hearing and the future looks pretty negative.

    Your advice is well founded and hope everyone are not going to sit by and hope everything is going to miraculously get better with out some intervention and dramatic policy changes.

    The world has changed and not for the better.

  2. Bill Robertson says:

    We can actually benefit from the economic destruction of the country. Not as much as Al Gore and the architects of the destruction, but enought to be able to buy what others have to sell. Stay smart. No guilt either. We didn’t do this, so we shouldn’t feel bad by taking advantage of what has been done to us.


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