Investment Philosophy

It's a bitterly cold day. You have lost all feeling in your nose. Your ears are hurting. You hunch your shoulders together to bury your head under the raised lapels of your greatcoat. You turn a corner and you see a frozen pond. Can you risk taking a short cut across? Or would it be safer to walk to the bridge half a mile down the road? You notice a man on the other side of the pond. He gingerly steps on to it. It holds the weight of one foot. He carefully places the other foot on the ice. A young woman behind follows his lead. As you watch, some children arrive with skates, and more adults follow them. Soon, the whole village is having a party on the ice. Each person has given the next person the confidence to join the party. The more people clambering on to the ice, the safer it feels. It's logical, isn't it? Or is it? Something makes you stop. You turn around. You walk away. Behind you, you bear the crack and the first scream.

Yes, you could say it is a dark vision, but it does the opposite of what most sunglasses do. Instead of increasing obscurity, it introduces clarity. As an increasing number of heavy bodies add themselves to the ice, human nature makes them feel the safety factor is increasing. But the clear-thinking observer realizes that their added weight means that the opposite is true. Each fresh body on the ice makes it more - not less - likely that the ice will crack. The global investment business today is a business in exactly the same way as the street market in Camden Town or Bangkok is. It is manned by salespeople who all have products they want you to buy. They make sure that what they sell is attractive. They tell you uplifting stories of how buyers of their services have generated wealth for themselves. They attract you to the ice ...

This is what has happened in the international financial markets right from the days of great depression to the 1987 crisis in US (Black Monday) to the 1997 East Asian Crisis to the latest subprime meltdown…the gullible investors who have followed the greater fool theory in the right earnest in the greed for short term money.

The lesson and the moral.. be greedy but be long term greedy!!!