From My Work-in-Progress Basket

One Thing & Another

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Word for the Wise

Preternatural (prih-tur-NATCH-uh-rul) – existing outside of nature; extraordinary. Example from George Will: “Beyond his preternatural affability, there is some acid and some steel.”

 Champagne Trick

A raisin dropped in a glass of fresh champagne will bounce up and down continually from the bottom of the glass to the top.

 

From My “Work-in-Progress” Basket

Principles of Wealth: #11 of 61

To acquire wealth, it is helpful to be able to define it. Fewer than one in ten people can. The answer is “stored value.”

That kid driving the red Ferrari? The doctor with the huge white house on the ocean? The attractive older woman wearing the Oscar de la Renta gown?

They look wealthy, but you can’t tell by their possessions. They might be poor. They might be worse then poor. They might be in debt.

What about your friend that is “pulling down two hundred G’s” a year selling hedge funds? Or that obnoxious kid you met in law school that charges $700 an hour for his services?

They may be rich. They may not be. Income can be an important factor in creating wealth but it is not a measure of it.

There is only one way to measure wealth – and that is the amount of value an individual has set aside for future use.

In financial terms (there are many forms of wealth), we generally refer to this as net worth: the difference between one’s assets and one’s liabilities. I prefer a more stringent definition: one’s net investible wealth. Net investible wealth is net worth minus any assets you plan to keep (and not sell) for the rest of your life.

Making big money and spending big money create the impression of wealth. But true wealth is only what you have put aside for future use.

Quick Marketing Idea: The Emotional Power of Repetition

Why is it that we never tire of hearing our favorite songs?

According Derek Thompson, writing in Hit Makers, it’s because our brains our wired for it. We respond to repetition when it follows certain patterns.

He cites a study on mice:

Exposed to the sound of a B note played repeatedly, the mouse will pay brief attention and then lose interest. But if a minor variation is added – say, the B note followed by a C note – the mouse’s attention will reengage. Not just that, but it will stay engaged for a good length of time even when the “tune” goes back to just a B note.

“A single variation is sufficient to break the mouse’s complacency and return its interest to the music,” the author posits.

Further tests suggested that the most effective pattern for keeping a rodent’s attention was: BBBBC-BBBC-BBC-BC-D. This, Thompson says, “is uncannily similar to the structure of successful pop songs that follow a pattern of verse-verse, chorus, verse-chorus, bridge.”

(It’s also similar to the rhyme structure of some poetry, like some sonnets.)

Advertisers (and propagandists) have long known about the emotional power of repetition. It makes the advertisement more memorable. And it makes it more believable as well. (See D. Trump.)

Suggestion: Lay this pattern over your next medium- to long-term promotional piece before you post it.

Look at This…

https://biggeekdad.com/2018/02/old-man-thinks-hes-younger/

 

 

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Miscellaneous Essays

The Worst Thing I Ever Said to Laura

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For years, Laura came to our seminars, sitting in the front row, taking notes and looking earnest. And at least once during each of those seminars, she’d pigeonhole me to tell me something she didn’tlike about my presentation.

A great consumer of self-help and get-rich literature, Laura always had some shiny new idea about wealth building that she believed I should be talking about instead of the “same-old, same-old” axioms I was then and still am espousing.

One year I remember her excitement as she explained “the law of attraction” to me.  Another year her big idea was networking. Still another she was all about multilevel marketing. I always listened and thanked her for her thoughts. Then I redirected the conversation by asking her how she was doing, about the progress she was making along the road to wealth.

Her response was always the same. The brilliant idea or strategy she had pitched me last year had failed to work because of some unanticipated obstacle. It was never her fault. It was bad luck or bad partners or sickness or stress or family obligations.

After six or eight years of this, I drew her attention to the elephant in the room: Maybe the problem was inside her head. Maybe all those obstacles felt insurmountable because of some subconscious reluctance to take action. Or maybe she found thinking about being rich a lot more fun than doing something about it.

 Laura, it may not surprise you, did not like my hypothesis. (In fact, that was the last time she ever came to one of our seminars.)

And her story is not uncommon.

 Most Americans (56%) rate wealth as “important.” For those under 30, the percentage is 10 points higher. And for lower-income and first-generation Americans, the belief in the importance of wealth is nearly 100%.

It’s human nature to want a better and/or richer life. But it’s also human nature to procrastinate – especially when the task is difficult and potentially life-changing.

Every year, millions of Americans enroll in self-improvement courses ranging from meditation to learning foreign languages to public speaking to losing weight, getting in shape, improving any one of dozens of social skills. And tens of millions read books on these subjects.

How many of them achieve their goals?

I’ve been unable to find any definitive data on that. But I can say from what I’ve seen over the years that the number is surprisingly small.

If I had to guess, I’d say that 50% never do anything more than pay for the book or program they bought. Of the 50% that start it, half don’t finish. And of the half that do finish, half of them don’t put what they learned into action.

So we are talking about 12.5% that invest in improving themselves and actually achieve the goal.

And here’s the thing. If you asked the 87.5% that never took action whythey failed to act, most wouldn’t admit the truth: that they couldn’t bring themselves to do the work.

What you would hear, though, are plenty of excuses about what was wrong with what they purchased.

I once told a well-known real estate guru how proud I was about the real estate programs my brother and I were developing. What I liked best about them, I said, was that they were designed to prompt students to take action. “We start at the very beginning. But our goal throughout is to get them to make their first purchase so they can start making money.”

“Big mistake,” he told me. “These people – they don’t want to be real estate entrepreneurs. They don’t want to be out in the world working. They want to be at home, taking courses. The best thing you can offer them after they have completed a course is another course. They’d rather pay you more money than take action.”

He wasn’t kidding. And he wasn’t wrong.

I agree with the English philosopher Herbert Spencer that “the great aim of education is not knowledge but action.” But there’s just so much a teacher can do…

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Miscellaneous Essays

The Virtue of Laziness

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Speed Up Your Career by Indulging Your Lazy Gene

The unpaid bills are stacked next to the unwashed dishes. You’ve been short about $1,200 per month since the divorce.

You need something to fill that now-a-memory, two-income cash flow gap. Something that’s not a pipedream. Something that’s feasible, flexible, and powerful. Something capable of producing more dollars per hour than you’ve ever made in your life.

It can’t be a financial investment, because you’ve don’t have enough in the market to make a big difference. So what can you do?

Before shutting down your computer for the night, you check your email. You see an advertisement. But before you delete it, you notice something in the message about extra income. “What the hell,” you think.

You click on the link and it takes you to a landing page titled “The Extra Income Project.” It’s a promotion for a collection of two dozen lessons, each one a different way to make extra money by working part-time from home. The author is someone named Mark Ford, said to be a best-selling author and a self-made multimillionaire. You’ve never heard of him. Still…

You order the EIP program. It arrives immediately, and you spend the rest of the evening looking through the lessons. One of them – “Service Businesses” – is particularly interesting. “Compared to other side businesses, a service business has the lowest barrier of entry,” this Mark Ford character writes. “It can be started with the simplest marketing methods, requires little to no start-up capital, and is likely to put you into business faster than any other sort of enterprise. The one requirement: You must be capable of doing high quality work.”

“I can do that,” you think.

Ford then lists several dozen service businesses, each with a short but helpful description of its benefits and drawbacks and income potential. Under “Landscaping Business,” you read: “This is a great business for people that don’t mind waking up early, enjoy working outdoors, and don’t mind getting their hands dirty… at least for a while. The income potential begins at about $25 an hour and can increase to $100 or more once you have a customer list of a few dozen people. If you are good at managing schedules and workers and do great work, this can easily become a business that makes you six figures.”

“I can definitely do that!” you think.

The next day, you spend $23 to print 500 colorful flyers advertising your new business. You use a variation of one of the pitches suggested by Ford:

Landscaping With Love

I’ll Make Your Lawn the Best

In Your Neighborhood, Guaranteed

First Service Only $10!

The $10 offer is an advertising trick – a “loss leader,” to prove what you can do.

It works. You get six responses in week one and land two Saturday gigs. By week four, you have $380 worth of weekly contracts. Your Saturday is now a workday, but you’re making an extra $1,520 per month.

You do good work, so you start getting referrals. You can, if you want, make even more money by working Sundays. That’s money you could use to lease a new car and maybe buy some new clothes. You’d have some left over for saving.

But do you want to work seven days per week? Hell no. You’re 52, not 22. You want the money but not the work.

There is a “Recommended Reading” section of the EIP program that lists several books that promise to “take you to the next level.” One is called Ready, Fire, Aim. It’s by the same author. Mark Ford. You order the book.

 To Hire or Not to Hire, That Is the Question

After reading the book, you think about your situation. You’re making an extra $1,520 per month by running your own part-time landscaping business on Saturdays. You’re tempted to expand it, but you aren’t willing to work seven days per week. The book has given you the obvious solution: Hire help.

But is it worth the cost and hassle?

Following the book’s guidelines on “analyzing growth opportunities,” you sit down with a pen and a sheet of paper and make two lists, one marked “plus” and one marked “minus.”

On the minus side, you include things like “the trouble of finding someone” and “managing people” and “figuring out the right compensation,” and so on.

The more you think about it, the longer the “minus” list grows. And yet you can’t think of anything to add to the “plus” list aside from “do less work” and “maybe make more money.”

You think, “This is exactly why I never wanted to have my own business. It’s just one long list of worries and concerns. Maybe this Ford guy is more smoke than fire.”

So you decide against hiring help. Instead, you accept a few jobs to do on Sunday mornings. You’ll make another couple hundred per week, and still have Sunday afternoon to relax.

A month later, you realize that you didn’t take into account rainy days and the occasional “Can you come back tomorrow?” You are making more money but working every sunlit hour of every weekend. It is wearing you down. It’s even affecting your performance at your weekday job.

You do the math. Doing everything yourself, you’re making about $50 per hour. You can hire someone to do the grunt work and pay him/her maybe $15 per hour. The difference, $35, would be your gross profit.

There would be some additional costs involved in growing your business, too. Taxes, for example. And you’d probably have to hire an accountant. But on an hourly basis, that couldn’t be more than, say, $5. That leaves you with a gross profit of $30 for each hour’s work.

That’s $20 less than you are making now. But overall, you’d be making about $1,800 per month instead of $1,500 while personally working the same number of hours.

It makes sense. But how do you make it happen? Where can you find a good worker?

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Miscellaneous Essays

Wealth Building for Beginners (Even if You Are Not Young Anymore)*

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4.- “The Most Powerful Force in the Universe”

Legend has it that Albert Einstein was once asked what he considered the most powerful force in the universe. He answered, “Compound interest!”

It’s commonly thought that Einstein was joking when he made that famous pronouncement. I’d like to think he was serious. Compound interest is indeed one of the most powerful forces in the universe of making money. But it’s also one of the most profoundly powerful forces in every area of human enterprise.

Whether your goal is to create a new vaccine, build a faster computer, design a better building, or eliminate poverty, the time and effort you invest in your goals will compound over time, providing you with increasingly greater rewards.

When it comes to wealth building, the more time you have to invest, the easier it is to become wealthy. So starting when you’re young gives you a major advantage. However, the advice I’m going to give you here will work for you no matter how old you are or where you are right now in your wealth-building goals.

A simple example of the power of compound interest

If you took a penny and doubled it every day for a month, how much would you come up with? A hundred dollars? A thousand dollars? How about a million dollars?

Not even close. If you start with just a single penny and double it every day for 31 days, you’ll end up with… $21,474,836.48. More than twenty-one million dollars in a single month!

Your original penny will have turned into two. But then those two will have turned into four, those four turned into eight, and so on. The growth of your money will have accelerated, or sped up, not only because your original penny was collecting interest but also because all the pennies your received as interest also began to earn interest. And so the growth built up – or compounded.

That’s how we get the term compound interest.

There are three components to compound interest:

  1. How much you invest
  2. What return you get on your investment
  3. How much time you stay invested
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From My Work-in-Progress Basket

One Thing & Another

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Word for the Wise

Claque (KLAK) – a group hired to applaud; a group of sycophants. Example as used by Charles P. Pierce in an Esquire article titled “Nobody Knows How to Play This Game Anymore”: “The bill passed the House because the Freedom Caucus, that claque of unreconstructed extremists who hold the balance of power there, gave in a little.”

 Did You Know…?

Cats spend 66% of their lives sleeping.

 

From My “Work-in-Progress” Basket

Principles of Wealth: #10 of 61

Wealth is neither absolute nor objective. This is so because those things that we value are by nature relative and subjective.

Your Richard Mille watch cost you $35,000 when you bought it 10 years ago, when the company first came into the public view. It worked no better than a $35 Casio. In fact, it worked considerably worse. You had to have it repaired twice and were charged several thousand dollars to do so. If the value you attached to your watch was pragmatic – keeping time and cost of use over 10 years – you’d feel the money you spent was a hugely foolish mistake.

But the company poured millions into advertising and became a status symbol, particularly among wealthy athletes and rap stars. It also raised its prices considerably. The current range is $250,000 and upwards.

Now you are told you can sell your “vintage, first edition” Richard Mille on the secondary market and walk away with $85,000 in cold cash.

Will you do it? That depends on how much you value its objective qualities of reliability and cost of use versus the subjective qualities of beauty, complexity, and prestige.

 

 He Did What?

Although I haven’t written much advertising these past 20 years, I did more than a bit of it for a 10-year stretch during the 1980s. After that, I coached and mentored copywriters, and between 2000 and 2010 wrote a few books on the subject.

Writing persuasive copy was probably the single strongest money-making skill I had back then. And it accounted for the lion’s share of my earnings. But I was always a little embarrassed to admit that it was my primary job. Today, copywriters are looked upon much like actors were during Elizabethan times: otherwise reproachable lowlifes in possession of commercially valuable talents and abilities.

I do remember when, besieged by such opinion, I look refuge in remembering that one of my favorite writers, Samuel Clemens (Mark Twain) spent many early years writing copy to make ends meet. And he wasn’t the only one.

Here are some other respectable (and in some cases venerated) folks that worked as copywriters before achieving fame in a non-advertising career:

* Sherwood Anderson, author

* Helen Gurley Brown, former publisher and editor (Cosmopolitan)

* Gary Comer, founder of Lands’ End

* Don DeLillo, author

* F. Scott Fitzgerald, author

* Terry Gilliam, director and animator

* Alec Guinness, actor

* Dashiell Hammett, author

* Hugh Hefner, publisher (Playboy)

* Joseph Heller, author

* Tim Kazurinsky, comedian

* Rick Moranis, actor

* Ogden Nash, poet

* Bob Newhart, comedian and actor

* Salmon Rushdie, author

* Dorothy L. Sayers, author

* Fay Weldon, author

Look at This…

https://www.youtube.com/watch

 

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Miscellaneous Essays

Wealth Building for Beginners (Even if You Are Not Young Anymore)*

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3.-Your Invitation to the “$150,000 Club”

In the last installment https://www.markford.net/wealth-building-for-beginners-even-if-you-are-not-young-anymore-2 of this series, I told you how I got started on my own wealth-building journey. I hope it amused you. Looking back at it now, I can see that the ratio I kept between foolish and sound habits was about 2 to 1. But that was enough. I hope it comforts you to know that you can do most things wrong (as perhaps your parents and teachers always reminded you was your habit) and still become as wealthy as you need to be!

The second thing I did was to introduce you to a very simple and crazily powerful wealth secret that most high earners never follow: As your income increases (and it will!), you must resist the urge to ratchet up your spending accordingly.

And thirdly, I shared with you one of the most important insights about wealth that I ever learned. Luckily for me, I learned it when I was still relatively young. (In my early thirties.)

That insight was this: You need a lot less than you probably think to live a rich life: A lot less wealth. And also a lot less yearly income to acquire that wealth.

As for income… If you can get your income above $150,000 a year and simultaneously curb your enthusiasm for expensive toys, your chances of one day retiring wealthy are about 99.9 percent.

As for how much “money” you’ll need to sock away… A very rough number would be about 12 to 15 times the amount of money you’d need right now to lead a rich life.

If you can get your income up to $150,000 or beyond (and as I will show you that is quite easy to do if you are willing to put in the right sort of time) and if you can save 20 percent to 30 percent of that (which is very possible if you manage your finances as I’ll suggest), you will arrive one day at a net worth of between $3 million and $30 million.

And that – if you know how to spend your money – will be enough to provide a great, rich life for you and your family.

Before we move forward on that, you have to answer one question…

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One Thing & Another

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Word for the Wise

Pinguid (PING-wid) – fat and oily. Here’s a lovely sentence from The Bunsby Papers by John Brougham that includes it alliteratively: “Peter was pinguid, plump, and plethoric – she was thin to attenuation.”

Did You Know… ?

If you add up all the numbers from 1 to 100 consecutively, the total is 5050. Keep that in mind. You never know when it will come up in conversation.

 

From My “Work-in-Progress” Basket

Principles of Wealth: #5 of 61

Wealth and income inequality are realities that exist in every economy – even those committed in principle to the distribution of wealth.

Many people today, believing that equality is an intrinsic and achievable good, seek to flatten financial inequalities through government programs and social action. A smaller group, sympathetic to the notion of equality but less trusting of governmental solutions, seek to create substantial personal wealth and then distribute some of that to others. Still others are dubious that financial inequality is intrinsically good and practically achievable. And a final group is sure that equality is intrinsically bad and can only be partially achieved and that only by severe repression.

My view is that human nature is innately opposed to equality. You can, by force, make a community financially equal for a moment in time. But an hour later, individuals within that community will get to work recreating inequality. Some will seek to have more. Some will be satisfied with what they have. And some will seek to have less.

This is the fundamental reason why history has shown us that the goal of achieving financial equality has never been achieved or even attempted.

From my book How to Speak Intelligently About Everything That Matters https://smile.amazon.com/Speak-Intelligently-About-Everything-Matters

Shakespeare is said to have contributed (by far) more words to the English language than any other person in history. He has also contributed some of the best loved and most often repeated quotations. Consider the following:

“All that glisters is not gold.” (The Merchant of Venice)

“Something wicked this way comes.” (Macbeth)

“Though this be madness, yet there is method in’t.” (Hamlet)

“It was Greek to me.” (Julius Caesar)

“Uneasy lies the head that wears the crown.” (Henry VI, Part II)

“Some are born great, some achieve greatness, and some have greatness thrust upon ‘em.” (Twelfth Night)

“The first thing we do, let’s kill all the lawyers.” (Henry VI, Part II)

“I smell a rat…” (Hamlet)

Look at This…

https://biggeekdad.com/2017/11/racing-through-edinburgh/

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Miscellaneous Essays

What I’m Doing With My Money Now and for the Rest of 2018

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Consult an expert, if you like experts. Talk to your broker. Read your broker’s “research” recommendations.

But don’t ask me what you should be doing with your money right now.

I have no qualifications as a financial advisor. No certificates. No degrees. I’ve never taken a single class in economics or accounting…

I’ve read a few books – ones that came highly recommended.

And yes, I was an advisor to and publisher of investment advice for nearly 40 years….

Which gave me an inside view on how the business works and a contact list of several dozen of the best-known stock analysts in the world. I know how they work and I’ve seen the results of their work, good and bad.

I keep tabs on the best of them. And incorporate the recommendations of a few. But when it comes to making decisions about what do with my (now my family’s) money, I follow my own rules.

My rules are not for everyone. So you may decide that they are not for you.

But if, like me, you are a timid investor…

If, like me, your fear of losing money is greater than your greed…

And if you are willing to work hard to make sure your active income is always increasing… every week and every month and every year…

Then you may be interested in knowing some of these rules that I follow and what, in particular, I plan to do with my money this year.

I have several dozen rules. Here are 10 of them:

  1. I don’t Invest in anything I don’t fully understand.
  2. If I am determined to break rule number one, I admit to myself that what I’m doing is gambling, not investing. And I proceed fully expecting to lose every penny I put on the line.
  3. I would never put all my savings into stocks or even into a portfolio of stocks and bonds. I have my money allocated in at least a half-dozen asset classes at all times.
  4. I don’t try to get from any asset class (stocks, bonds, real estate, commodities) or subclass (blue chip stocks, growth stocks, etc.) more than 10% to 20% of its natural (historic) rate of return. When someone recommends an investment “sure to” do much better than that, I steer clear.
  5. Before investing in anything, I have a Plan B in place. A proper Plan B is a pre-set (and if possible automatic) protocol that cashes me out of the deal as quickly as possible and with the least amount of damage.
  6. As a rule, I don’t invest in growth stocks. I prefer buying shares of world-class, income producing, Warren Buffett type companies that I feel confident will still be strong in 20+ years. And I do not sell these stocks in market downturns. I often buy more of them in order to “average down” my buy-in price.
  7. I devote the largest portion of my portfolio to income-producing real estate properties and use a trusted partner to manage them.
  8. The next largest slice of my investment pie goes to private businesses – either in stock or debt or convertible debt. When considering such investments, I ask myself how well I understand it and whether I have some control or at least influence on management should they take actions that seem wrong to me. (And I have my Plan B.)
  9. I don’t “invest” in hard assets or currencies because I don’t consider them investments. (They have little or no intrinsic value, do not produce value, and do not earn income.)
  10. I never invest more than a very small portion of my net investible wealth (net worth minus my house and other things I don’t intend to sell) in any single investment. (Long ago, my limit was 5%. Now it’s 1%.)

Now it’s time to tell you what I’m doing with my money this year.

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One Thing & Another

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Word for the Wise

Popinjay (POP-in-jay) – a strutting, supercilious person. Example from Ernest Hemingway: “If a writer of prose knows enough about what he is writing about he may omit things that he knows and the reader, if the writer is writing truly enough, will have a feeling of those things as strongly as though the writer had stated them. The dignity of movement of an ice-berg is due to only one-eighth of it being above water. A writer who omits things because he does not know them only makes hollow places in his writing. A writer who appreciates the seriousness of writing so little that he is anxious to make people see he is formally educated, cultured or well-bred is merely a popinjay. And this too remember; a serious writer is not to be confounded with a solemn writer. A serious writer may be a hawk or a buzzard or even a popinjay, but a solemn writer is always a bloody owl.”

 Did You Know… ?

In ancient Rome, men in court swore by their testicles. (The word for “testify” comes from the Latin word for “testicle.”)

 

From My “Work-in-Progress” Basket

Principles of Wealth: #8 of 61

The desire to work less is not a vice but a fundamental aspect of emotional intelligence. When combined with commitment, persistence, and common sense, it creates economic efficiency.

I was taught that hard work was laudable and laziness was deplorable. These notions still linger as truths subconsciously, in my emotional intelligence. But some years ago, I noticed that a major motivation in working my way up any organization I joined was the desire to do less of the hard and tedious work and more of what I imagined would be easier and more fun.

From one perspective, you could say that my motivation was laziness (if your definition of laziness is not wanting to work). But when I realized that I was perfectly happy to work 24/7 on projects that inspired me, I decided that I should stop chastising myself for not wanting to make my bed in the morning or spend hours setting up meetings and appointments or doing any task that was innately uninteresting – i.e., that felt like “work.”

I realized that this impulse was a form of intelligence. It is the desire to find more efficient ways of accomplishing a given task. This impulse is an important part of the desire to invent new and better gadgets, to create more efficient work protocols, and to delegate work as you make your way up the power and authority chain.

I now separate the desire to do less of the hard or boring work with the desire to do nothing at all. The first I call the efficiency impulse. The second I call laziness – simple, inexcusable, and unforgivable laziness.

I encourage my proteges to indulge themselves in the former and rid themselves of the latter. I do the same every time I am faced with something I don’t want to do. I ask: “Is this the efficiency impulse I’m feeling or am I just plain lazy?”

Something to Think About

In 1950, there were scarcely 100,000 people in prison. Now, there are nearly 2.5 million.

Look at This…

Wow!

I don’t know who this kid is but she is wise way beyond her age.

She hates the motivational messages that say be the best and she is write. There is, as she says, always someone prettier, smarter, more talented and simply better than you.

Trying to be the best at anything is a fools game.

She says the goal is to be happy and that is true although that needs a lot of unpeeling—which I will do in future messages. But I tell you this: this kid is smart. If I had one tenth the wisdom she has at thirteen….oh, well….that’s exactly what she’s talking about.

 https://biggeekdad.com/2017/12/words-wisdom-13-year-old/

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How to Protect Yourself From the Next Global Economic Collapse

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I wrote the following essay a while ago. It was recently published in Laissez Faire Letter https://lfb.org and I thought I’d reprint it here because it’s relevant…

By Mark Morgan Ford

Making good investment decisions is both a science and also an art.

You can, for example, track the performance of investment sectors, fund managers, and even investment advisers with precision. You can see their successes and failures with precision. But past performance, as we all know, is no indication of what will take place in the future.

You can calculate with reasonable precision global money flow, governmental and personal debt, unemployment, the gross domestic product, and so on.

But these data combined won’t tell you with any certainty what and when some macroeconomic event might happen.

The problem is twofold. The global economy is so damn big and complicated, and humanity’s response to economic shifts is equally complex. And this is to say nothing of “black swans”—unexpected and random events that cause major turmoil.

Which is to say that, for practical purposes, anticipating the future is impossible.

Still, as lowly investors, we must try. We must make regular buy, sell, and hold decisions about investments we own. And we must make general judgments about the market in order to assess our holdings.

I’ve been in the financial publishing business for more than 35 years. In that time, I’ve worked with many of the best investment writers and followed their advice. I’ve even been able to see unpublished analytics that track their performance.

I’ve concluded that most haven’t a clue about the future. But there are some who are actually very good at making specific investment recommendations over periods of time ranging from five to 15 years.

There are also some who are very good at big-picture economic analysis. By very good, I mean they are able to write arguments that convince me, a skeptic.

Of those few that are good, about half are perennial optimists. The other half, of course, are perennial pessimists.

What I do is this…

I read the best big-picture writers I know—not to “know” what the future holds, but to get a sense of what might happen. Then, I look to the specialists for specific advice that would apply.

Around 2004, my favorite big-picture pessimists were predicting a collapse of the real estate market, the dollar, and the stock market. They predicted a serious economic recession as a result of the insanely overvalued real estate market and the government’s love affair with paper money.

The optimists were saying not to worry.

I found the pessimists—especially my colleague and business partner Bill Bonner—more convincing.

So what did I do?

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