Is Your Government In Business Of Giving Bad Advice? If So, What Can You Do?
There was a very interesting insider discussion on this point in the May 22nd Wall Street Journal. Look at the column “The Intelligent Investor” on B7.
Seth Klarman who has a phenomenal track record on making money spoke at a CFA institute meeting last week. Specifically the WSJ quoted him as saying: “The government is now in the business of giving bad advice.” “By holding interest rates at zero, the government is basically tricking the population into going long on just about every kind of security except cash, at the price of almost certainly not getting an adequate return for the risks they are running. People can’t stand earning 0% on their money, so the government is forcing everyone in the investing public to speculate.”
The key point is to aware of this situation and strategically think about the risks you may be taking without understanding accurate facts to base those decisions on: such as, the balance between risks you are taking and reasonably projected returns, availability of financing, and the interest rates and terms on future financing you may pay.
Take a few quiet moments to compare financial risks you are talking and the likely return for those risks. On a scale of one to ten with 1 being the risk you area taking and 10 being the reward you can reasonably expect to earn, how balanced are you?
Either smile with a satisfied glow, become more opportunistic or hunker down appropriately. Pull out this article regularly and adjust as needed.
Seth Klarman who has a phenomenal track record on making money spoke at a CFA institute meeting last week. Specifically the WSJ quoted him as saying: “The government is now in the business of giving bad advice.” “By holding interest rates at zero, the government is basically tricking the population into going long on just about every kind of security except cash, at the price of almost certainly not getting an adequate return for the risks they are running. People can’t stand earning 0% on their money, so the government is forcing everyone in the investing public to speculate.”
The key point is to aware of this situation and strategically think about the risks you may be taking without understanding accurate facts to base those decisions on: such as, the balance between risks you are taking and reasonably projected returns, availability of financing, and the interest rates and terms on future financing you may pay.
Take a few quiet moments to compare financial risks you are talking and the likely return for those risks. On a scale of one to ten with 1 being the risk you area taking and 10 being the reward you can reasonably expect to earn, how balanced are you?
Either smile with a satisfied glow, become more opportunistic or hunker down appropriately. Pull out this article regularly and adjust as needed.
Posted by FiscalDoctor com at 5/24/2010 7:19 AM 
Categories: contingency planning, business growth, Enterprise Risk Management, risk, risks, corporate governance, due diligence, taxes, inflation, ERM, Profitability
Tags: politicians business growth Enterprise Risk Management profitability risk contingency planning risks due diligence taxes inflation ERM corporate governance
Categories: contingency planning, business growth, Enterprise Risk Management, risk, risks, corporate governance, due diligence, taxes, inflation, ERM, Profitability
Tags: politicians business growth Enterprise Risk Management profitability risk contingency planning risks due diligence taxes inflation ERM corporate governance
Nice article and informative as well. for few of people like me this article is really helpful.
Email Marketing Software California, San Francisco
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You might also like my free eBook 5 key areas where risks are lurking - http://tinyurl.com/ykt7wzx
or this process visual I created to help people get their hands around risk management.
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Every business entrepreneur is always wanna generate its maximum sale and bring high concentration in satisfying his consumers.then the effort to generate the high consumer satisfaction is preferable to me!
The points you emphasize is surprisingly well and great to follow and i have taken those points into consideration!
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When it comes to us.....I think we have wait for the good advice from the government....HAh
Every Other Day Diet
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You have got some great posts in your blog. Keep up with the good work.
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If you like any posts, please feel free to cross post them. Also I have a number of articles on ezine articles, you can use with attribution on your website.
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