Shake Rattle and Roll

Bill Haley and the Comets made the song “Shake Rattle and Roll” by Jesse Stone popular and it is still played by most jazz musicians. In my life, I have seen the stock market shake rattle and roll several times. John D. Rockefeller, just before the great depression, would go in a barber shop almost everyday to get his shoes shined. The “shoe-shine boy” told him one day that he should be very proud of him because he started buying stocks on the stock market. Rockefeller, when he returned to his office, called his broker, and told him to sell all his stocks, “when the shoe shine boy starts buying stocks it is time for me to get out of the market”.

It was time for most of us to get out of the market before or after the “dot com” disaster.  When people who knew nothing about the stock market thought that trees would “grow all the way to the clouds” (to the uninitiated every thing is obscure) and these people, professionals and nonprofessionals, specialists and dumb-bells, all thought they had the market “figured” and so we have the disaster of today.  Hetty Green (1864-1916), Witch of Wall street, who made a 100 million dollars by living more frugally then people of even that time could imagine. (she wore the same clothes until they rotted, mostly ate oatmeal, cold because she would not pay for heat) she relied on tips that she overheard from professional brokers but was known mostly for her frugality during the Gilded Age. 

Of course we know that in this age of illegal drug addiction or legal drug sales there are ways to make much money legal and illegal.  Historically, I believe the way to become successful, as a money maker, if this is your objective, is with real estate or stock market securities.  Inflation has protected the real estate market until recently.  It was difficult to buy real estate that did not increase in value.  This has saved me, in real estate transactions, many times. For example, to buy a beach house for 100,000 and sell it in a few years for 1 million.  It becomes more difficult with stock market securities because you have to expect the “unexpected”.  Of course you can use the unexpected drops as buying opportunities unless, as is the case now, the entire world is in recession.  Banks, finance dealers, the entire economy, shakes, rattles and rolls with any political words or geographical upheaval.  

When the solid fortresses of financial institutions have an epidemic of corruption, when the regulators are more political then dependable, when the corporate world which gives the foundation of integrity begins to beg from the last source of transfusion, a broke federal government who can only print worthless money as in Zimbabwe, pre-revolution China, pre-Nazi Germany, and even Castro’s Cuba, there is no consolation. 

The new President, Mr. Obama, has a university financial advisor Dr. Roemer who has never run a hot dog stand or paid any payroll taxes.  Richardson, Daschle, Geithner, Ragner, and so many of his Democrat appointees and advisers are just political hacks whose major business experience has been to keep from paying their own taxes.  Our country, is like a man drowning in a pond, the only ones around who can offer any help is one on the bank who cannot swim or one in the water who is about to drown also.  In the chaos and the nauseating pitiful-ness of AIG, GM, Chrysler, Wachovia, or any of the hundreds of business people cities, counties, states, who are seeking a “bailout” from hard working, frugal living tax payer money. 

It is like Mr. Bernie Madoff (with his four homes worth 24 million, Mercedes, etc), where were the regulators, the tax collectors, the investigative reporters, the inquisitive junkies of advisory news letters, while and before he was enriching himself, his family, and political friends.  I once told a security buyer, an old doctor who had made his money the hard way, he had worked for it, that I subscribe to several advisory newsletters.  He said, “you are just wasting your money, buy securities the same way you buy anything else, with common sense”. 

There is no magic or miracle in getting rich.  It is better to attempt it slow then fast.  There is no substitute for hard work whether behind the plow or studying investment books.  In my early life, when I was even more stupid, I would occasionally encounter a young man who seemed to have unusual potential for success.  One book I would recommend to him and tell him I would pay him $10 if he read the book involved self development and investing.  I never paid out $10 because most young people like young investors just want success without work.  I told one, I will teach you everything I know about buying real estate and securities but you will have to do much studying on your own. He said, “I would just rather get a check every month”. ”.