Suggestions needed on how to prosper in the present environment.

[Sapiens]

Most of us here understand the fallacies of financial economic exploitation without regard to the realities of the physical economy.

For those that have already taken the necessary measures to protect themselves, what can you suggest to do, in order to continue to produce and generate wealth within the current system?

Some partners have suggested we construct an extra-legal market exchange for the trade of goods and services world wide, akin to gaming companies’ environments (Tencent’s QQ Coins, SecondLife Linden Dollars).

You input is welcomed.

-Sapiens

[Spartacus]

Re: Suggestions needed on how to prosper in the present environment.

Get a job at GS or Merrill Lynch or whatever, and SAVE THOSE bonuses.

Learn Hindi and Chinese on the side - maybe Goldman would send you to their Mumbai or Hong Kong offices, for you to build up your personal rolodex.

Most of us here understand the fallacies of financial economic exploitation without regard to the realities of the physical economy.

For those that have already taken the necessary measures to protect themselves, what can you suggest to do, in order to continue to produce and generate wealth within the current system?

Some partners have suggested we construct and extra-legal market exchange for the trade of goods and services world wide, akin to gaming companies’ environments (Tencent’s QQ Coins, SecondLife Linden Dollars).

You input is welcomed.

-Sapiens

[Sapiens]

Re: Suggestions needed on how to prosper in the present environment.

Get a job at GS or Merrill Lynch or whatever, and SAVE THOSE bonuses.

Learn Hindi and Chinese on the side - maybe Goldman would send you to their Mumbai or Hong Kong offices, for you to build up your personal rolodex.

No need to learn Hindi or Chinese since most high value creators already speak English. You have something in the idea of building a rolodex of a network of wealth creating contacts.

[Spartacus]

Re: Suggestions needed on how to prosper in the present environment.

You didn't comment on the saving, whic is something I'm curious about - how much of those bonuses is being spent as quickly as it comes in?

It used to be that it would take 3 generations to get rid of substantial wealth (with some of the 2nd and most of the 3rd generation being ... well, like Ms Hilton).

Nowadays it seemingly takes a lot less time.

No need to learn Hindi or Chinese since most high value creators already speak English. You have something in the idea of building a rolodex of a network of wealth creating contacts.

I myself do want to learn those languages,

AND I suspect the natives would prefer doing business with someone who showed interest and respect.

So do it because it's profitable. And it's the right thing to do -


PS
When my employer sent me to Finland, I rode the trains (my colleagues took taxis), and I found a really good way to meet women was to ask them to teach me the language ... creative language screw-ups seemed to be quite endearing.

I don't know your marital status, but there you go - another reason to learn the language. If I ever do get to China and India I'm going to do that (I find some asian women even more attractive than the tall, skinny blondes with high cheekbones that populate Helsinki), even though I'm told women respond a little differently to obvious come-ons.

[DemonD]

Re: Suggestions needed on how to prosper in the present environment.

Short CFC and DSL?

I'm looking for exit points for my mutual funds in taxable accounts and for some of my individual stocks. I've been pretty much 100% invested in stocks for 4 years now and I'm going to take some of that off the table and ride out the next 6 months then go from there. If gold dips below 600 i'll be buying something gold-related, likely a gold mining company like FCX (freeport mcmoran).

Go long: commodities, energy, utilities, cash, consumer non-cyclical
Go short (or just ignore): RE (duh), tech, financials, consumer cyclicals, industrials, transports
Go whichever way you see fit: biotech, health care, international

Believe it or not I still see some good value in small-cap value, but i'm guessing it will go down, but not as bad, as the rest of the financial markets. A long term time horizon on small value would probably be needed (5-10 years or maybe more). I like long on consumer non-cyclical because that goes towards things like cigarettes, bandaids, alcohol (tomatos and beer! as my old economics professor would say), soap, etc. This keeps a portion of your stocks in dividend paying high-quality companies that will be able to keep up with or beat inflation through price increases.

In any case this is about how I'm going to balance my taxable portfolios, and I'm going to move around some of my 401k stuff to safer alternatives outside the US stock markets. Since I'm 29 years away from withdrawal age I'm using the KISS method for my Roth and just doing a DRIP in one fund and one company.

Oh yeah and I'm also:

1. Likely to pay off a couple of months on my student loan to help offset capital gains (while getting rid of some of that debt) and
2. Not quitting my day job or even thinking about going to another job for at least 3 years.

[Sapiens]

Re: Suggestions needed on how to prosper in the present environment.

You didn't comment on the saving, whic is something I'm curious about - how much of those bonuses is being spent as quickly as it comes in?

It used to be that it would take 3 generations to get rid of substantial wealth (with some of the 2nd and most of the 3rd generation being ... well, like Ms Hilton).

Nowadays it seemingly takes a lot less time.

Spartacus,

Saving may seem like a simple concept, but there is much to it, and it all has to do with how you perceive yourself, where you are in your present condition of social station and where you want to be, your age, your skills and abilities, your desires, and most of all your personal nature.

The resources you leave behind to your decendants is always subject to their own personalities and its whims. Teaching them your principles would seem to be a better legacy than leaving them substantial material resources.

I myself do want to learn those languages,

AND I suspect the natives would prefer doing business with someone who showed interest and respect.

So do it because it's profitable. And it's the right thing to do -

I didn't state you should not learn the languages, I said you wouldn't need to. I do agree with you that it is the right thing, since it usually leads to a closer relationship through better appreciation and communication with each other.

So tell me, what other ideas do you have?

[Sapiens]

Re: Suggestions needed on how to prosper in the present environment.

Good points DemonD.

Short CFC and DSL?

Do you know enough about their fundamental position to short them?

How vulnerable is Countrywide, or Downey? Click on their names for info from SeekingAlpha

I'm looking for exit points for my mutual funds in taxable accounts and for some of my individual stocks. I've been pretty much 100% invested in stocks for 4 years now and I'm going to take some of that off the table and ride out the next 6 months then go from there. If gold dips below 600 i'll be buying something gold-related, likely a gold mining company like FCX (freeport mcmoran).

I don't believe in Mutual Funds, and have not used them. Therefore I don't have anything constructive to say about them.

Go long: commodities, energy, utilities, cash, consumer non-cyclical
Go short (or just ignore): RE (duh), tech, financials, consumer cyclicals, industrials, transports
Go whichever way you see fit: biotech, health care, international

Believe it or not I still see some good value in small-cap value, but i'm guessing it will go down, but not as bad, as the rest of the financial markets. A long term time horizon on small value would probably be needed (5-10 years or maybe more). I like long on consumer non-cyclical because that goes towards things like cigarettes, bandaids, alcohol (tomatos and beer! as my old economics professor would say), soap, etc. This keeps a portion of your stocks in dividend paying high-quality companies that will be able to keep up with or beat inflation through price increases.

I agree, under health care I would add pharma.

2. Not quitting my day job or even thinking about going to another job for at least 3 years.

How about if your present employment is in a subsidized industry and your position is eliminated? How would you cope?

[Spartacus]

Re: Suggestions needed on how to prosper in the present environment.

Spartacus,
I didn't state you should not learn the languages, I said you wouldn't need to. I do agree with you that it is the right thing, since it usually leads to a closer relationship through better appreciation and communication with each other.

I assumed that was your meaning.

So tell me, what other ideas do you have?

I would write an investment letter but for the fact that I reflexively, pervasively and strongly doubt my investment decisions. Every one. Even after I exit at profit.

All my financial ideas I've posted here the last year.

If I was in a position to do so, I would move to either Mumbai or Delhi tomorrow - I'm 1.5 generations removed from India and I have "family" there (in quotes are because they are 2 steps removed). I have barely passable Punjabi and Hindi. barely.

My biggest investment is Silver (bullion in a safety deposit box and Ag mining stocks).

I'm EXTREMELY nervous about it.

No debt and cheap, cheap, cheap living.

I'd like to move into the financial services area (my earlier comment about applying at JPM/GS/MLynch was not a joke) but don't have enough money to do an MBA at the name brand schools [1][2], and I'm extremely doubtful it will be as good a field when I get out.

For the money not in Silver, I like Steve Sjuggerud's corpus.
http://www.dailywealth.com/sdw_archive.asp

I've done some research on alternative monies (and somehow this almost always seems to tie into intentional communities) and I concluded long ago that the network effects of currencies will always make alternatives niche players - and the niches rarely get very big.

[1](where the rolodexes get built)[3]
[2] I emphasize brand name because I've known folks who went off to generic schools and were not happy with the outcome(ending up slightly lower than before starting the MBA, after great expense and time).
[2] and [3] I have the sales/schmoozing skills to build the rolodexes, but can't stand the results (the people drawn by the schmoozing - see "Jocks and Geeks")

[grapejelly]

Re: Suggestions needed on how to prosper in the present environment.

if you have wealth I think a great thing is to possess precious metals with a good deal of that wealth. Not paper but actual physical metals. Then a good idea is to get money in a sound brokerage account out of your native country. You don't want all your wealth in your own country.

As far as anything else goes, well, I wouldn't pick a career right now in mainstream financial services or as a real estate broker. But that said, if you have some good ideas you can probably make a fine living in either one, provided you set yourself apart from the mainstream. If I was going into financial services I'd go into wealth preservation using overseas assets, physical precious metals and so forth and I'd position myself as an alternative to the usual run of the mill financial advisors who are always bullish on stocks and bonds.

[Sapiens]

Re: Suggestions needed on how to prosper in the present environment.

I've done some research on alternative monies (and somehow this almost always seems to tie into intentional communities) and I concluded long ago that the network effects of currencies will always make alternatives niche players - and the niches rarely get very big.

Good stuff, Spartacus.

Could you expand on the above? It seems very interesting, and I would like to know your views.

I have the sales/schmoozing skills to build the rolodexes, but can't stand the results (the people drawn by the schmoozing - see "Jocks and Geeks")

Ah, those type of individuals are the primary types that populate the financial markets, what are the alternatives?

-Sapiens

[Sapiens]

Re: Suggestions needed on how to prosper in the present environment.

if you have wealth I think a great thing is to possess precious metals with a good deal of that wealth. Not paper but actual physical metals. Then a good idea is to get money in a sound brokerage account out of your native country. You don't want all your wealth in your own country.

GJ, I hold PMs for their characteristics to preserve purchasing power, not to make me wealthy. You create wealth with your abilities and your desire to serve for what the Market demands.

I believe and agree with you that you must have alternatives on where to reside if your own home country becomes unstable.

I'd go into wealth preservation using overseas assets,

What kind of assets would you suggest, and why?

-Sapiens

[DemonD]

Re: Suggestions needed on how to prosper in the present environment.

Good points DemonD.
Do you know enough about their fundamental position to short them?

How vulnerable is Countrywide, or Downey? Click on their names for info from SeekingAlpha

They are both very vulnerable. I have thought about shorting a bunch of mortgage and housing related stocks, however I will admit to extreme fear in ever shorting anything. To me shorting is betting against the house which I never want to do, even if my odds against the house are 2-to-1 or greater. The fear is that MM's (or the PPT) will start buying stocks causing an increased demand and then forcing brokerages to have the people shorting the stocks to cover (short squeeze). I could buy puts which would be the safer option, but again my level of sophistication with stock investing isn't that great that I feel confident to do that.

DSL is probably a better short candidate as their stock price hasn't dropped and I believe their biggest market was the Alt-A loans (which I believe will go down).

As for CFC, they also have huge subprime exposure which probably won't show up until they release their next earnings report, but their CEO has been unloading shares like armageddon is coming (something like 32 million dollars worth in the past 18 months). Or maybe more! Just check the insider transactions: http://finance.yahoo.com/q/it?s=CFC

Ugh, looking at that page makes me want to hurl. He gets options that he exercises below $10/share and immediately sells them for over $40/share. Absolutely disgusting. In any case, this is a "rats jumping off the ship" as I see it, not to mention CFC is the biggest mortgage lender in the country. They are also laying off people left and right, downsizing the business, etc. etc.

Again I wouldn't short them because I'd be afraid of a short squeeze, but if I had a bit more play money I might give it a shot.

I don't believe in Mutual Funds, and have not used them. Therefore I don't have anything constructive to say about them.

I'm a big believer in indexing through vanguard. For the vast majority of people, simple indexing will give you nice returns over the long haul with less risk. For example, EJ loves to talk about how the price of gold has gone up since 2002. The vanguard precious metals index fund has handily beat the return of gold bullion in that time.

How about if your present employment is in a subsidized industry and your position is eliminated? How would you cope?

I work in health care. It is possible that my department may be downsized, but I have a few things going for me:

1. I work for a very large company that continues to see increased growth in patient loads.
2. The geographic area I work in has a lot of affluent people, or middle class people that are generally well-off as older citizens (they may not be rich but they have houses they own outright, a steady monthly retirement income, no debt, and financial situations that will easily carry them to the end of their lives with healthy inheritances for their heirs.)
3. The demand for my specialty is growing.
4. If my department is downsized, other subspecialties will be downsized before mine, I would say a good 20% of the positions would have to be eliminated before mine would be considered for elimination.
5. In my specific profession, there is a huge shortage of practitioners as there aren't enough schools in southern CA to meet demand, PLUS many people that go to schools here end up going back to other places because their family is in other parts of the state or country, OR.... tada... the cost of living is way too high in Los Angeles.
6. If for some reason I do get laid off due to downsizing, my services will be useful somewhere in this world (if not this country).

Man I could go on and on. In any case I'll be okay, as long as I don't do anything stupid that gets me fired or my license suspended or revoked.

[Spartacus]

Re: Suggestions needed on how to prosper in the present environment.

As someone who's researching the alternative monies area yourself right now, you have better access to information (the Internet) than I did when I did my work.

It's been a long time since I did that work so the details are gone now, and what I wrote above were my major conclusions at the time - namely, these monies in a large fraction of cases were started at, or tied to, or supported by intentional communities (what used to be called communes).

One story that seemed to be replayed many times was that Many get their start and prosper for a short time when a highly motivated individual or group push very hard and offer many incentives to join the currency. In many cases the people who come in later use the system for what they can get out of it and leave when the costs come due.

When the originators lose energy and/or interest, the whole thing collapses.

[grapejelly]

Re: Suggestions needed on how to prosper in the present environment.

GJ, I hold PMs for their characteristics to preserve purchasing power, not to make me wealthy. You create wealth with your abilities and your desire to serve for what the Market demands.

I believe and agree with you that you must have alternatives on where to reside if your own home country becomes unstable.




What kind of assets would you suggest, and why?

-Sapiens

As a money making proposition, if I were to go into finance I might help wealthy people in the following way.

First, because of US government pressures, it is harder to open a foreign brokerage or bank account if you are US citizen. The solution is simple, which is to set up an offshore entity and open the accounts through that entity. This results in some complication at taxtime but not a big deal as the point isn't minimizing taxes so passing through the gains or losses to your personal tax situation as a US citizen is fine.

Then I'd work with my clients to invest them in safe haven assets. The usual suspects including physical precious metals, junior miners, large cap miners, etc.

I might also set up personal relationships with a few trusted lawyers in places like Panama, Argentina, etc., who can help get a passport and quick permanent residency status in places that are pleasent to live in.

I would be filling a role for my clients, helping them preserve their options in this world with a percentage of their net worth to hedge.