Bryan Binkholder Discusses Politics, Emotions, Investing & Behavior
The world is always changing and unpredictable.
Who would have thought that a company that was dead in the mid 1990’s would become the centerpiece of change and disruptive new technology? Yes, I’m talking about Apple. They did this while garnering support from traditionally more ‘liberal minded’ people (and conservative because I own Apple products) while using low cost labor in China and tough business principles of attempting to destroy their competition (see also Steve Jobs’ memoir and his disdain for Google and their apparent stealing of technology to create Android). But what disruptive new forces could cause their new empire to fall? The trash can is full of past Apples (see also World Com, Yahoo, etc).
Who could predict that today we honor (and much of our public adores) celebrities that go through rehab more often than my dog tries to get into our trash can? New York attempts to ‘outlaw’ sugary drinks over 16 ounces while they relax police enforcement for marijuana use. Yeah, it will be funny when the guy on the street is arrested for drinking a 32 ounce soda while smoking pot which will be deemed ok. Who could imagine we’d have a President not mention the amazing D-Day Invasion of June 6, 1944 that liberated Europe (2 years straight now that he’s done this) while stepping in to comment on issues like Trayvon Martin and the police officer/Harvard professor/Beer Summit. Yes, these are crazy times.
Now for a dose of reality!
We’ve always had crazy times…a president in the 70’s who knew and organized break-ins at Watergate, another who had oral sex with a 22 year old intern, lied to a grand jury (never mind that) and is now the next Winston Churchill. All the while economic issues have always impacted us: the Arab Israeli War of 1973, Oil Embargo with oil prices shooting up 400%, gas lines, Vietnam War protests and riots in the streets, Inner City Rioting and the incredible Nuclear War drills we had in school—drop, duck, cover. Do you remember?
But Bryan, the political atmosphere is so divisive today! Right……Never mind that little thing called the Civil War. Or, better yet, let’s go back to the May 22, 1995 Time Magazine cover after the Republican Congress slashed the budgets and social welfare programs: “1.4 Trillion to be cut…..Will We Survive?” Babies on the street, people without help or support. Yes Virginia, we made it and in 1999 Time then proclaimed that Clinton, Reich and Larry Summers had balanced the budget (never mind they were against many of the cuts that made it possible)!
So here we are in 2012.
After reading a book by Dr. David Jeremiah on End Times Prophecy from the bible—book of Revelations stuff—there does seem to be a ton of things lining up if you are from that religious persuasion (which I am as a matter of clarification and full disclosure). Regardless, I use this as an example that even when we have very astute people and religious leaders who predict things, they can be very wrong. Dr. Jeremiah’s book, published in 2008, notes the ‘Rise of Europe’ and how their power is growing. (As a side note: Bible prophecy says the AntiChrist will come from Europe.) The book notes that Europe is marching past the United States and will become the dominant country/economic community.
Well, present day items are showing most likely it will be torn apart as they come to grasp with the fact that they are shackled by leftist policies that are outlawing coal plants, stifling energy and thus raising the costs rapidly in the sake of the new religion of ‘Global Warming’. Oh wait, after a few years of really cool weather and snow they changed it to ‘Climate Change.’
So What’s Your Point Bryan?
The point is, Mr. Potter, (sly reference to It’s a Wonderful Life) that the more we think we know things the more we don’t. Don’t buy into the lie that America’s Days are past or that we can’t overcome. We will. The last three elections since 2008 (Scott Brown in Massachusetts, November of 2011—the largest Congressional turnaround in history, and Scott Walker/Wisconsin) show we want American greatness talked about along with the principles on which this country was founded. No more frisking Great Grandma at the Airport and no more Drones flying over farms in Nebraska and Iowa monitoring farmers for underage workers and EPA violations on animals.
Investing & What We Should Be Doing
As to investing, know you can’t find the ‘next Apple’ because for every Apple there have been 50 Apples that failed. We only see the winners and that’s the biggest secret I’ll tell you. Wall Street and Financial Advisors only show you what you want to see—winners. They concoct numbers to make every investment sound good. Also, don’t fall prey to titles and names. Two weeks ago on the show (listen to the archives on the site or iTunes Podcast) I talked about a CFP who was given my Compensation and Disclosure Form to complete. He spent the next few weeks trying to explain to the investor why he had recommended—get this one—NON TRADED REITS (Real Estate Investment Trusts) that paid him 7% commission upfront and CAN NEVER BE ACCURATELY VALUED. Think about it. It is ‘non-traded’ so in order to liquidate, you have to find someone somewhere to buy it (low supply of buyers…low price) because there isn’t a market for it! This is a highly ILLIQUID investment and inappropriate but this CFP tried to quickly spin the situation when he was confronted with explaining his decisions.
Folks, the conflicts are huge in the industry.
Pick up my newest work, The Case Against Mutual Funds, which sells for $49.95 but people on my newsletter can get it for free by going to www.BlueOceanMutualFund.com. The team at Blue Ocean Portfolios has sponsored it and is making it possible for you to get this for Free. Also, make sure you pick up my Compensation Disclosure Form. Have your advisor fill it out. Remember, it’s your money!