I am an investor.  Therefore, to make good returns on my capital and preserve my wealth, I must “speculate”. 

What do I mean by the term “speculate”?  The term is deliberately provocative.  It has many connotations, not all of them laudatory.  Many people hate “speculators”.  What does the term mean?

There is an old New Yorker cartoon that encapsulates the purpose of the speculator: An elderly lady is sitting in her stockbroker’s office, and she asks “Assume we’re meeting in a year’s time.  What am I kicking myself for not investing in then?”

It’s funny, but true.  Speculators see into the distant future and try to get ahead of the wave of investors who buy when the trends are obvious.  Speculators must appear “crazy” when they buy.  If the buy is obvious, it is already fully priced.  No significant returns can ever be made from a trade that everyone agrees is a good one.  If that was the case, there would be no seller willing to sell. 

Speculation does not involve deception but it does involve differing views of value on the part of the seller and the buyer of an investment asset.  Both are speculators.  One is speculating that the price will go down.  The other is speculating that the price will go up.  A “trade” is really an investment “conversation”, a bet, an argument over whose view of the “true” value of the asset is correct.  One person will be proven to be right.  The other, wrong.

That’s what speculation is all about.  It is both exciting and daunting at the same time. 

This blog is dedicated to tracking trends that will maximise the chances of NOT having to ask the “old lady’s question” at the end of this decade.

2020 is our investment horizon.  It is also a play on “2020 vision”.  I hope, through this blog, to provide information that will show us the way to maximise investment returns this decade, using the Austrian School as the foundation of our investment strategies.  I believe the themes coming from websites such as Daily Reckoning and PrudentBear.com will provide the best foundation for making the best returns this decade.

Finally, I have specifically chosen the blog name “Speculator” because all government’s hate “speculators” but this is a profoundly mistaken view of markets.  Markets need speculators.  Real “speculation” involves seeing opportunities where others do not, taking risks, seizing opportunities before they are identified by the masses and profiting from anticipating trends before they manifest themselves in price movements.  Speculators – in the true sense of the word – are essential to ensure the proper functioning of markets.

This blog is dedicated to all true “speculators” – those who analyse underlying trends and are willing to go against the crowd, to be contrarian, to take risks in order to enjoy extraordinary returns.

We are all “speculators”.  Putting money in a savings account is speculation – speculation that the price of fiat paper currency will not be debased.  Puting money in a retirement account managed by a “specialist” is speculation – speculation that the “specialist” is not going to rip you off.  From an Austrian perspective there is no distinction between saving, investment and speculation.  Saving in money is one form of “investment”. 

The question you should ask is this:  Am I making the best quality decisions to stay ahead of the inflationary beast?  Where can I preserve the purchasing power of my savings/investments?  What will the “monied” people desperately want to buy (at any price) in 10 years’ time?  How can I buy what they will want now?

This blog is dedicated to answering these questions.

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