Three Wise Men

Any readers out there who will confess to acting on a hot tip, be it stocks, horses, or cars? I have on all three. I learned the same lesson from all three.

A close relative advised me to buy shares in a tech stock that was trading back then about where Ford Motor Co. is currently trading now. The argument went . .'even if the company goes under, book value of the stock is about double where you can load up on it now'. I bought a lot, and in 8 months, it turned to worthless paper. And that was 8 years ago.

Horse racing is fascinating, but I'm not a student of the game. Too many variables, so I 'outsource' the analysis to 'those who know'. And then I second guess and add my own horses to my trifecta and daily double bets (because I'm smarter) and of course, I lose.

Once I agreed to buy a car from a brother of a new sister-in-law without close inspection; a handshake deal. The car was a lemon and died maybe 10 times on the way home. When I called him and said I wanted my money back, he said, 'too late, I cashed the check already'.

Truth is, I wasn't willing to do the research in each of these instances, and relied on the word of others. I was looking for the easy way out, and so, in hindsight, I deserved to have come up short.

I mention this because I have just read an article that profiles 3 investors who were around and investing DURING THE DEPRESSION! ! ! And still at it on Wall Street. How about that for perspective? Mssrs. Irving Kahn, 103 yrs. old; Walter Schloss, 92 yrs. old; and Seth Glickenhaus, 95 yrs. old all have the unique vantage point of contrasting the crash of '29 with the meltdown of '08. Is '08 worse because of the global nature and the unimaginable amounts of money involved?

No. All 3 of these gentlemen see opportunity because they are looking matter of factly at the numbers of publicly traded companies without emotion. You know, debt to equity ratios; P-E ratios; how much cash there is on a company's book to be able to withstand dire market conditions. This is pure 'roll-up-your-sleeves' and make your OWN decisions about what has VALUE versus what has SPIN (spin being broker recommendations, expected growth of sector P-E ratios, etc.) AND, owing to the availability of timely information, where co-ordinated, pre-emptory steps can be taken to control damage, they believe that today's problems are to be dealt with more efficiently. (There are many more industries to invest in than there were during the Depression.)

This is written to acknowledge that wisdom and time tested principles don't go out of style. (Counter to what our Western advertisers would have you believe.) Take responsibility for your own investments; read up on yields, portfolio management, risk management (do your own research); look for undervalued assets and riskless investments; and incorporate this discpline into your life like people do with counting carbs and logging gym hours.

Kahn, Schloss, and Glickenhaus wouldn't still be around for us to learn from their examples if they had listened to hot tips.

Become financially self-reliant.