Jim Rogers’ Keys To Success

Jim Rogers’ Keys to Success (taken from the titles and sub headings of each chapter of the new book, “A Gift To My Children”):

1. Do not let others do your thinking for you

2. Focus on what you like

3. Good habits for life & investing

4. Common sense? not so common

5. Attention to details is what separates success from failure

6. Let the world be a part of your perspective

7. Learn philosophy & learn to think

8. Learn history

9. Learn languages (make sure Mandarin is one of them)

10. Understand your weaknesses & acknowledge your mistakes

11. Recognize change & embrace it

12. Look to the future

13. “Lady Luck smiles on those who continue their efforts”

14. Remember that nothing is really new

15. Know when not to do anything

16. Pay attention to what everybody else neglects

17. If anybody laughs at your idea view it as a sign of potential success

via Jim Rogers Blog: Keys To Success.

The End of the Future – Peter Thiel

Modern Western civilization stands on the twin plinths of science and technology. Taken together, these two interrelated domains reassure us that the 19th-century story of never-ending progress remains intact. Without them, the arguments that we are undergoing cultural decay — ranging from the collapse of art and literature after 1945 to the soft totalitarianism of political correctness in media and academia to the sordid worlds of reality television and popular entertainment — would gather far more force. Liberals often assert that science and technology remain essentially healthy; conservatives sometimes counter that these are false utopias; but the two sides of the culture wars silently agree that the accelerating development and application of the natural sciences continues apace.

Yet during the Great Recession, which began in 2008 and has no end in sight, these great expectations have been supplemented by a desperate necessity.

via The End of the Future – Peter Thiel – National Review Online.

An Ode to the Joy of Cash

A Value Investor’s Perspective on Tail Risk Protection: An Ode to the Joy of Cash

Long ago, Keynes argued that the “central principle of investment is to go contrary to general opinion, on the grounds that, if everyone is agreed about its merits, the investment is inevitably too dear and therefore unattractive.” This powerful statement of the need for contrarianism is frequently ignored, with disturbing alacrity, by many investor.

As always, a comparison between price and value is required. One of the nice aspects of insurance in an investment sense is that it is generally cheap when its value is highest (although this may no longer be the case given the rise of so many tail risk products). That is to say, because most market participants appear to price everything based on extrapolation, they ignore the influence of the cycle. Thus they demand little payment for insurance during the good times because they never see those times ending. Conversely, during the bad times, the average participants seem willing to overpay for insurance as they think the bad times will never cease.

via A Value Investor’s Perspective on Tail Risk Protection: An Ode to the Joy of Cash by James Montier


i totally agree with his comment “if you’ve been an investor in this market, there is one clear cut lesson from all of this government intervention – don’t fade government intervention.” … and that outrageous level of manipulation (crowding out genuine analysis of reality) is exactly why i am taking the winter off.  and i don’t agree with him that there is no stimulus imminent because i think the Fed will bring in more QE3 as soon as the markets fall 5-10%.


In the last few years we’ve witnessed unprecedented government intervention at every twist and turn.   We’ve seen massive fiscal stimulus, endless monetary stimulus, QE2, Euro plans, etc, etc.  It’s been an endless parade of government “fixes” that don’t appear to have really fixed anything.  And if you’ve been an investor in this market, there is one clear cut lesson from all of this government intervention –don’t fade government intervention.  If you’ve shorted government intervention in the last few years you’ve had your face smashed into the pavement time and time again.

The problem is, without the government intervention, market participants inevitably settle into the reality that the government isn’t really fixing anything through all of these various policies.  They’re more or less shuffling chairs around on the deck of the Titanic.  And yes, they can move the chairs where ever they want when ever they want, but they’re not fixing the hole that is sinking the ship.  So this market has turned into one great big “buy the rumor and sell the news” event.  This all really started in early 2009 when rumors of suspension of mark to market and the implementation of several other government policies were rumored to be on the table.  At that time I made an incredibly lucky buy call the day before the market bottomed on March 8th (my thinking was entirely based on this idea of not fading the government), but I never could have imagined that the strategy over the next 3 years would be one of constantly trying to front run the governments at every twist and turn.

The recent Euro “fix” is the latest and greatest case of government intervention.  And if you’ve been short into this event you’ve had your face rightfully smashed.  And while this government intervention appears to be great in short bursts it also has an inevitable downside.  And the problem for the markets now is that they have to once again wake up to the reality that there’s no government intervention in the near-term.  The EMU leaders have unveiled their great “fix”.  Fiscal stimulus in the USA is off the table as politicians fight over the bankruptcy of the USA that will never occur.  And QE3 is on the table, but unlikely to be implemented until we see inflation indicators simmer down.  Who will calm the markets in the near-term with its much needed intervention?

One of the keys to succeeding in this market during the balance sheet recession has been discovering government interventionist policies, front running them and selling the news.   It’s absurd that I am even writing about this, but this is our reality.  The global government put has come to dominate every twist and turn in the markets.  There is no buy and hold.  There is no value investing.  There is only one big roller coaster of volatility based on the decisions of clueless politicians who fail to understand our monetary system, fail to understand the impact of their policies, but will do anything to make sure that the portfolios of wealthy politicians don’t get blown to smithereens.  Unfortunately, like any trusty rollercoaster, we get off right where we got on.

In sum, know your government intervention.  While all this government intervention might not be doing much for capitalism, the failure to understand it is surely detrimental to your portfolio’s well-being.  Sadly, this is what “investing” has come down to in the day and age of the “New Normal”.  Welcome to the global government put.  Fight it at your own peril.


Juan Enriquez – As The Future Catches You

a brilliant, insightful and funny speech about our great human future

Juan Enriquez, founding Director of Harvard Business School’s Life Sciences Project, and bioengineer entrepreneur, in support of his book, “As The Future Catches You,” speaks at the University of Carolina about change, the value of education, and America’s future.

via Viddler.com – Juan Enriquez – As The Future Catches You

A Guy’s Gotta Eat = US/Canada food price comparison

I have been thinking of doing a one-to-one shopping exercise to see what an average trip to the grocery store costs in each of the countries so this is the month. In the U.S. the shopping was done from the October 23rd Arizona Republic flyers and at the local Albertsons store. In Newmarket from the October 20th Era-Banner flyers and the local Metro store. To keep it fair I did not factor in any of the coupons that were in the Arizona paper even though I believe that this could have reduced the U.S. spend by as much as another 20%.

I tried to keep it at what we would use in a typical week other than items like paper towels, toilet paper, laundry detergent etc. that you buy in larger quantity to last the month. All sizes are exactly the same as I translated oz to ml to make sure I was consistent.

The verdict: It cost me $87.27 less to shop in the U.S. Price before taxes. If I add in a case of beer and bottle of wine difference is $111.58. With a little bit of work I thing you could stretch these items out to 2 weeks, so using this you would be looking at an Annual Savings in excess of $2,500.00 – Probably more if you were to use coupons or go to Costco.

Details as follows …

via A Guy’s Gotta Eat | 2sidesof49.

Cain sees the solution to Iran

this is the plan that i’ve dreamed of hearing from a politician!

What do you think of the Obama administration’s handling of Iran and what would you do differently, if anything?

I don’t know if this is going to translate well in your language: Choke. Choke them economically. Here’s what I mean by that and I know that that’s not politically correct to say but here’s the idea: It costs them $70 a barrel to break even on their oil. It costs Saudi Arabia $30. We’re going to develop an energy-independent strategy. We will move toward energy independence in the Cain administration. We’ve got the resources to do it, we need the will, the leadership and we get some of these unnecessary regulations out of the way. We will impact the world price of oil. We get the price of oil down to $70 or below, and the Iranians won’t have enough money to build a nuclear program. They’re going to have to worry about feeding their people instead.

via Israel Hayom.

Stratfor Sizes up the Euro Situation

Stratfor is out with an analysis of the European situation. China remains the the elephant in the room, while the Europe will be resolved by money printing, as I’ve maintained all along.


Nice decision tree, but money printing and an inflation tax on the German citizens to pay for are not included as options, despite being a core scenario.

via Stratfor Sizes up the Euro Situation.

Paul Ryan’s ‘Politics of Division’ Speech

Rep. Paul Ryan (R., Wis.) ventured over to our digs at the Heritage Foundation yesterday morning to deliver one of the most thoughtful and effective defenses that I have ever heard of our free-enterprise system and of what he calls the “American idea.” 

The American idea, of course, refers to the American Dream: the notion that America is an exceptional nation where every American enjoys the opportunity to rise up and realize, through hard work and individual skill, his or her dreams.

Ryan devoted much of his speech to a relentless dissection of the president’s divisive class-warfare approach to governing. He turned the tables on this insidious view of the world and laid claim to the moral and economic high ground. “Throughout human history,” he emphasized, “the American idea has done more to help the poor than any other economic system ever designed.”

A thoughtful man, Ryan clearly yearns for an intellectually honest debate that pits the philosophies of the two national parties against one another. Drop the cheap shots and the intellectual laziness. Concede that the other side, though perhaps misguided, genuinely believes that its solutions will work and is not carrying water for some evil special interest. Strive for a civil and elevating policy debate worthy of Bill Buckley’s Firing Line.

Ryan’s frustration on this point came through when he dismissed the president’s rhetoric as “petty.” Addressing Obama’s contention that Republicans favor “dirtier air, dirtier water, and less people with health insurance,” he asked: “Can you think of a pettier way to describe sincere disagreements between the two parties on regulation and health care?” An honest debate conducted with civility, he feels, would advance the conservative cause because, at the end of the day, America is a right-of-center nation.

Although he didn’t put it this way, he also seemed to draw a distinction between the routes one takes to acquire his or her wealth. The legitimate route requires hard work, self-sacrifice, innovation, risk-taking, and the other virtues we associate with the Horatio Alger stories of upward mobility. Government needs to get out of the way of these successful entrepreneurs. But there is also a subset of the wealthy who took a tainted route to riches, one that triggers what he calls “the real class warfare that threatens us.” This consists, he argues, of “a class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules, and preserve their place atop society.” The solution? Conservatives must mount an assault on corporate welfare in all its forms (earmarked spending, special-interest provisions in the tax code, and regulatory provisions that reward winners and penalize losers) and end the universal nature of entitlements — i.e., stop sending Social Security and Medicare benefits to Warren Buffet and others who reasonably qualify as “rich.”

There is much more here to digest. Conservatives running for public office and those of you who find yourselves in endless ideological debates with the guy in the next cubicle or the cousin who still loves Obama would do well to read this speech closely. And repeatedly. It is, to coin a phrase, a rhetorical roadmap in defense of freedom. 

via Paul Ryan’s Latest Roadmap – By Michael G. Franc – The Corner – National Review Online.