Archive for May, 2013

What’s happening?

Markets are genuinely crazy at the moment.  Do you go where the government and bankers want you to go or do you fight the trend and get hit?

I don’t know the answer but I know the choices.

Gold and silver – smashed.  But premiums are rising on physical and the market is completely dislocated.   Will central banks lose control?  Don’t know.  But they will have to, if the prices are going to reach their natural levels.

House prices – crazy.  But governments keep pushing us to buy.  Do you?  In the US, probably YES.  In Australia – probably NO.  Look at yields and relative prices and that will give you the answer.

Stocks – insanely crazy.  Do you buy banks and go with the flow?  In my view probably yes.  The government will support them until they completely die.  When that happens it won’t be worth living.  So buy the banks, by all means.

Just don’t tell me this is a free market.


Are you alive? Then you have to gamble.

Interesting article from one of Australia’s most successful businessman, Gerry Harvey here and here.

First, he doesn’t donate to charity because there’s no point helping “no hopers”.  Fair enough.  I interpret that to mean he doesn’t want to waste resources and subsidizing people’s bad habits that got them into trouble in the first place will just delay them confronting their real problems and adjusting to reality and getting out of the rut they are in.

Second, he has been through huge trials and tribulations.  He lost $2 billion in a year in the GFC.  He’s made mistakes opening in Ireland and Slovakia.

BUT – he’s alive, he’s worth over a billion and he enjoys life.  He’s has grown from his mistakes and kept on going.  He’s has taken a punt on life and, basically, won.

That is admirable.  He’s found enjoyment in breeding racehorses to keep him going.

I admire his outlook and his success.

Even in this insane monetary world, some people still should be admired for what they do.  Gerry Harvey is one of them.

He is apparently not the most generous person in the world.  A born salesman.  But basically a good, hard-working, decent person.

At least he’s not a banker.

If you’re alive, find something you believe in and go for it.  Don’t die wondering.  Or you’re already dead.

Like that homeless guy you walked over the other day.  He stopped trying.  Which guarantees losing.

Housing is taking off again. All aboard this train?

US housing is spiking again.  Some places are up 50% in six months.  Non-recourse loans allow for fast action on the up side and the down side.  The price movements indicate “bubble” – but who I am to stop a bubble in progress.

What would I do right now?

Aussie bank shares.

Gold and silver.

US housing in Hawaii and San Fran and LA.

You’ve got to follow bubbles to make money.  The only asset not in a bubble is gold.  But it will be, eventually.