November 19, 2008: Ruminations and a Smart Note

As we observe the market ebb and flow - generally downstream, I am satisfied with my total portfolio performance to date vs. the carnage observed via act and deed elsewhere. We all have to feel sympathy for the retiree crushed by the downward bias of the stock market. And other investment vehicles offer no safe haven. I feel very fortunate to have excellent rental real estate, which I have added to this year. I am beginning to come to the conclusion that with a more progressive tax policy, stocks and bonds are going to be less popular investments. Tax avoidance schemes and income-producing real estate, with its bi-partisan approved tax deferred/avoided benefits and only-to-get-larger government housing giveaway,er, assistance programs to a class envy public are likely to be in the forefront of any holistic investment plan. Financial planners had better dust off their annuity, real estate, life insurance and trust certification certificates and mount them to be seen by every person coming into their office asking "what do I do now?"

A note to the extreme speculators reading this blog, do you dare to nibble at some GMAC SmartNotes hoping that these roach hotel securities pay off if GM or GMAC get a part of the bailout pie? I have a very modest bet on it.

We have had similar periods of duress and expanded government in our history. Andrew Carnegie, the brilliant industrialist who lived through monumental change and still managed to make billions in steel on the upside of his career (giving most of it away to institutions and personal causes later in life, such as Carnegie libraries throughout the country and the Hague Peace Palace for leaders to meet to talk rather than wage war, etc.) usually had something interesting to say. Here are a few of his quotes:

All honor's wounds are self-inflicted.

And while the law of competition may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department.

As I grow older, I pay less attention to what men say. I just watch what they do.

Concentrate your energies, your thoughts and your capital. The wise man puts all his eggs in one basket and watches the basket.

Concentration is my motto - first honesty, then industry, then concentration.

Do not look for approval except for the consciousness of doing your best.

Do your duty and a little more and the future will take care of itself.

Every act you have ever performed since the day you were born was performed because you wanted something.

He that cannot reason is a fool. He that will is a bigot. He dath dare not is a slave.

Mr. (J.P.) Morgan buys his partners; I grow my own.

People who are unable to motivate themselves must be content with mediocrity, no matter how impressive their other talents.

Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community.

The 'morality of compromise' sounds contradictory. Compromise usually is a sign of weakness, or an admission of defeat. Strong men don't compromise, it is said, and principles should never be compromised.

The average man puts in only 25% of his energy and ability into his work. The world takes off its hat to those who put in more than 50% of their capacity, and stands on its head for those few and far between souls who devote 100%.

No person will make a great leader who wants to do it all himself or get all the credit for doing it.

You cannot push anyone up the ladder unless he is willing to climb.

There is little success where there is little laughter.