Check it out – www.goldbergcapitalmanagement.com
Finally, the website is up and running! You can use the site to access your Schwab account, research the companies that we follow, read past newsletters, comb GCM’s SEC filings, visit our blog, etc. In lieu of required mailings, please find these posted on the website. Your feedback is most welcome. (There was nothing I could do about the guy in the photos, though!)
So, what were the statesmen of Europe thinking when they allowed Greece into the euro zone with access to the credit markets at interest rates without accounting for the risk? Like a college kid (not mine) given multiple credit cards for the first time, the Greeks maxed their borrowings asap and…..Guess what? OPA!!
Here’s my quick take on government involvement with free enterprise: When government guarantees are involved, the profit-and-loss system that determines risk becomes obsolete. Profits encourage risk-taking, while losses encourage prudence. When the government backs an entity (think the Mae brother & sister), the inherit sanity of the profit and loss system completely erodes. If profits arise, the private firm cashes in; if losses, the TAXPAYER foots the bill! If only I could arrange a no-lose situation for clients. OPA!
It was not all that long ago that the tally of federal income and outgo produced a surplus. I kid you not. (Come on back Billy C.– we need ya!) It will take a long while to get back to a balanced budget, but we are blessed with natural bounty and optimism. If only our politicians could stand together for the common cause. As Churchill pointed out though, ours is the worst form of government… except for all the others. For the clients who have been with me for many years, you know that I practice what I preach AND eat my own cooking. You’ve heard me advocate for years about the virtue (and sanity) of a long-term/visionary approach. I believe that 2011-2012 will bear the fruit of this belief. Several of our little “gems” are beginning to percolate and gather traction and momentum. If you go to the homepage of the website and click on publicly-traded small cap stocks GCM follows (under See our Investing Profile), you can follow many of our companies. Keep an eye out for news of our “little guys” in the coming months.
THE TAXMAN TAKETH A man had fallen partway down a ravine through which a raging river was turbulently flowing. People were crowding around trying to pull the man to safety before the river swallowed him up. They were all shouting at him, “Give me your hand”, but the man would not reach up. A Mullah elbowed his way through the crowd and leaned over the man. “Friend,” he asked, “what is your profession?”
“I am an income tax inspector,” gasped the man.
“In that case,” said Mullah, “take my hand!” The man immediately grasped the Mullah’s hand and was hauled to safety.
The Mullah turned to the amazed bystanders, “Never ask a tax man to GIVE you anything”!
-traditional Muslim tale
AND YOU THOUGHT IT WAS JUST A FABLE
In 600 B.C, Aesop wrote the first investment primer. He said, ‘A bird in the hand is worth two in the bush.’ However, Aesop forgot to include when and how you get the two in the bush. Investing is simply figuring out your cash outlay (aka: the bird in the hand) and comparing it to how many birds you think are in the bush and how many birds you can get out of it.”
Don’t Let ‘Em Get You Down
Whether I like it or not, clients are asking my opinion much more often about the safety and soundness of the markets in light of recent events and forecasts. Fortunately, I was trained in macro-economic theory, but the truth is– in today’s world, it is impossible to analyze all factors/events to paint a realistic picture of the macro-world. Sorry, but anyone who claims to process all the information and make sense of it is either a fool or a liar.
Fifteen years ago, clients would check their stocks of mutual funds in the morning newspaper. Today, many clients have running ticker symbols at the bottom of their computers, and the Wall St. Journal updates stories to the minute. News, information, and even fundamental analysis is flowing into peoples’ brains through sources that never before existed, exposing them to macroeconomic data that can’t possibly be interpreted. It’s become BIG business to provide doomsday information and frighten investors – financial reality programs have gotten pretty good at it.
The result– the pathology of our investing age- is that financial consumers are constantly being driven to a state of frenzy and high anxiety. I know this to be true! How does this work to our benefit? If holding stocks makes your stomach churn, then you might be reluctant to buy or own them. Multiply that effect by a few million investors, and it could drive up the risk premium. That, in turn, could generate proportionately higher long-term returns for people who either have a strong tolerance for uncertainty or fear-mongering. As stated, I do not believe that anyone can accurately interpret a thousand data points but, what I CAN provide is a way to put all this scary information into perspective. I truly believe that GCM’s investing style can greatly take advantage of the fear-mongering and negative flow of information. Seek the truth and thou shall benefit!
What Money Is For
Money was invented to relieve stress. That’s right–stress! See, early man had no money and, hence, plenty of stress. He had to hunt his own game, build his own tent, break his own horses, carry his own water, and defend himself against the barbarian hordes – every single day. Very stressful. So, man invented money which allowed him to pay butchers, roofers, auto mechanics, plumbers (and divorce attorneys) to do all these things for him. Money relieved the stress caused by the battle to survive.
Or, at least it was supposed to. But at some point we forgot that money was created to relieve stress and, instead, began to see money as a source of stress. Like junkies, we turned a trifle invented for relaxation into a personal slave driver. We began to plot, plan, and scheme about how to gain more of it; we began to measure our worth as men in monetary terms, a brutal and unforgiving game.
Money is neither intended to be a measure of personal worth, nor a magical get-out-of-misery-free card. Money is medicine – stress medicine – to be applied in the way you take aspirin to cure a headache. Gathering up more of it than you need doesn’t soothe the hurt any better; all you need is the right dose for whatever ails you.
Bottom line: Money can, in fact, buy you relief from stress. It’s not much good for any other purpose. A lot of it won’t buy you love, it won’t buy you respect, and it sure won’t buy you bliss any more than a lot of aspirin will buy you contentment.
But….let’s face it — it’s a heck of a lot easier to be happy when you don’t have a headache!
It’s time to make a down payment on happiness
Goldberg Capital Management is an investment adviser registered with the State of CT Department of Banking. This Newsletter and its contents are for informational and educational purposes only. You alone will need to evaluate the merits and risks associated with the use of the information provided herein. Although this Newsletter may provide information relating to approaches to investing or types of securities and other investments you might wish to buy or sell, no information provided in this Newsletter is intended or should be construed as an investment recommendation or endorsement from Goldberg Capital Management. Please remember that past performance is no guarantee of future results.