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Lookout Below
There is nothing terribly complicated, difficult or fancy about that. How many Americans save half what they earn and dollar cost average or use long-term Buy Stops and Sell Stops to enter and exit positions intelligently near major long-term bottoms and tops?
http://en.wikipedia.org/wiki/John_Templeton
Sir John, who lived 95 years, shared another secret of great health and wealth: Do not borrow.
As national Presbyterian Elder who set up a foundation for Spiritual Progress and awarded Mother Theresa, he knew the Bible said in Proverbs 22: Borrowers serve lenders. That’s why it’s called debt service.
He also knew and practiced A good name is more desirable than great riches, Humility and respect for the LORD bring wealth, honor and life, A generous man will be blessed, He who loves a pure heart with gracious speech will have the king for his friend and Do you see a man skilled in his work? He will serve before kings.
Sir John literally had clients and kings for friends and foundation members.
We were fortunate to exchange gifts in Lyford Cay, Bahamas, where he lived and worked to stay objective on the markets, with the occasional visit to Wall $treet Week with Louis Rukeyser, London or Templeton Oxford where we did research during a family crisis.
Perhaps Sir John’s most valuable investment insight for today was corollary and consequence of The borrower serves the lender.
He learned in the Crash of 1929 while on Wall Street that all assets correct at least the amount they were financed.
As a young professional, he saw people who put 10% down on the market lose 90% or more. He warned toward the end of his life that 120% financing of real estate would likely not end well and suggested as us people get out of debt.
We further applied this insight to derivatives, which may require as little as 1% or nothing down with AAA credit. Several warnings for mass media publications were ignored in 2006. Gracious speech does not mean ignoring the truth. Thus we write this piece for peace.
