How Long Can This Mess Last?

By Al Thomas

There seem to be quite a few who think they know the answer. Economist are quoted daily using pages of Greek formulas. They are predicting anywhere from 6 months to 6 years or longer. Using the same data the PhDs (that's Piled Higher and Deeper) how can they have such diversified conclusions. Then there are the mutual fund managers who claim the bottom is in and we are headed back up. No one is tripping over by their piles of rose petals - yet. Financial planners are as bad as mutual fund managers because they want to have their clients think they know what is going on. Another menagerie of strange beasts called politicians will tell anyone dumb enough to listen that they are going to fix everything with more new laws. As if we don't have enough already. There is one law that has yet to be proposed. How about this? For each new law to be put on the books an old one must be taken off? Can't do that. It might put professional politicians out of business. I almost said out of work, but we all know the only work they do is trying to be re-elected. When they get to Washington they left their brains at home. Closer to an answer yet with as many diverse answers are fundamental analysts. They use all the data that can be found about companies and demographics, There is hardly a number left uncrunched. Then there are the technical analysts. These are the people who rely on past performance to predict future events. The experienced technical people are amazing, but again they can miss the mark by miles. These are the chartists, seasonal indicators, Elliot Wave enthusiasts, Dow Theorists and on and on. Let's not leave out the weirdoes. Those who predict using astrology, Sun spots and little green men in flying saucers. Do I go too far? What it really boils down to is you can't trust the prognostications of very many. There is no one who is right all the time. You are the final master of your money and your destiny. If you continue to be part of the pack of lemmings you will go over the cliff with them. The type of person an investor must find as an advisor is one who is willing to change his mind when he is wrong. Most of the advisors get an idea and it hardens into concrete. If an investor plans to have any money left at the end of this recession he needs to find an advisor who is flexible and can see the long term possibilities of the stock market direction. There is no individual or method today that can accurately predict how long this recession will last. An investor must do what he can to protect his capital. If anyone who is managing money loses 15% or 20% of a portfolio the investor must immediately take his money. Cash under the mattress is better than watching an "expert" lose it.

Copyright 2009 Albert W. Thomas All rights reserved. Author of "IF IT DOESN'T GO UP, DON'T BUY IT!"

Comments to info@mutualfundmagic.com