scratch-mark

Is It Time?

As some of you know, I quit trading the markets full time at the end of 2007. I’ll not be looking back. I’d rather work on a startup any day. That said, I do still poke my nose under the hood of the financial markets from time to time, and I think we may have finally hit bottom, from which a rather explosive rally could develop.

Yea, I know; I know. America’s comeuppance is for a complete meltdown, depression, bankruptcy and asset crashes all over, and the ensuing misery that ought to befall such a financially irresponsible nation.

On the other hand, of far more importance is that I haven’t seen such an opportunity to be buying (stocks, real estate) or starting a business in a long time. Guarantees? No, certainly not, but you will be far better off in the long run if you do the opposite of what everyone else does. Go lean and mean when times are great. Then, when recession or other financial woes hit, you can more likely weather the storm; and then when things are at their worst, begin your expansion and big risk taking.

Just looking at all the negative sentiment in headlines all over the world convinces me that we’re on the verge of a turn-around. Since when does the press (or public sentiment) ever get anything right, or have any clue what they’re talking about? Of course, if things do turn around, it will be seen by all the current Chicken Littles as just another “asset bubble,” “credit bubble,” “bailout,” “giveaway,” and so on. I have always come from a different perspective: sunrise has meaning because of sunset; and what would light be without darkness? Euphoria without pain? Effortlessness without trouble? Riches without poverty? How do you know a boom, if you haven’t seen a bust?

No guarantees. I have little fear of losing everything I own, and I also understand that I have only limited means to prevent something like that from happening. That’s freedom, in my book. I loath the state for getting in my way, and its meddling in everything from top to bottom, but it’s but one factor. Freedom offers no guarantees and in fact is something quite opposite. If you think you’re getting squeezed by the stochastic interactions of the state’s machinations in public policy and the economy, just wait until you have real political and economic freedom. I, of course, would gladly accept that kind of real freedom and the consequences that come with it. But very few others would.

Richard Nikoley

I'm Richard Nikoley. Free The Animal began in 2003 and as of 2021, contains 5,000 posts. I blog what I wish...from health, diet, and food to travel and lifestyle; to politics, social antagonism, expat-living location and time independent—while you sleep—income. I celebrate the audacity and hubris to live by your own exclusive authority and take your own chances. Read More

2 Comments

  1. Justin Owings on July 15, 2008 at 14:50

    As someone who is "ahead of the game" in most areas of life, is there any reason you're not too early here?

    Don't get me wrong, I feel a bounce is in order here. But I'm not jumping into financials any time soon.

  2. Richard Nikoley on July 16, 2008 at 09:39

    "As someone who is "ahead of the game" in most areas of life, is there any reason you're not too early here?"

    Perhaps. Nobody really knows. There's risk, sure, but it's clear that there are lots of assets in real property and equity that are on sale right now. I've got everything riding on both a property development we're about to break ground on (five high-end townhomes) and an Internet startup, so I'm not in the market to be buying anything, but if I did have cash sidelines I'd be bargain shopping right now, buying what's on sale.

    "Don't get me wrong, I feel a bounce is in order here. But I'm not jumping into financials any time soon."

    I'm talking more than just a bounce. My guess is that we may be getting ready for a long relentless grind higher, up to 1500ish in the S&P, which will make all the financial woes take a back seat and they'll be left by the press to resolve themselves over time.

    But I'm also prepared for anything to happen. I know the financial sector has been beaten down hard, but I've not really taken a look at any of the individual bank stocks since last summer.

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