Minyan Mailbag: Charge Till Ya Drop?
NEVER base financial decisions on an attempt to keep up with the Dow Joneses.
Happy 2007! I know that we all pride ourselves in going against the crowd, retail America, the herd mentality, the magazine cover jinx, if everyone is betting Team A, bet Team B, etc.
I am in full agreement and think your newest colleague Dan Kadlec's latest column offers (in my view) the best financial advice to anyone in this situation.
Given your mention of Flippers in Trouble, along with your always sage views on the "haves" vs. everyone else, I'm left to wonder if there will ever be a point where 99.99% is so blown up that they get a "do over." Does this mean "Don't Worry Be Happy" and charge till ya drop? And that those who are acting with financial integrity and living within their means retrenching are just missing the punchbowl? I don't know how you accomplish this but I'm interested in your thoughts.
Thanks for the 'Ville!
Thanks and happy new year to you. A few thoughts come to mind when reading your mailbag. I'll try to summarize them in kind:
- Dan Kadlec, our new personal finance editor, hit the nail on the head with his out-of-the-gate MV scribe. His mainstream financial acumen will serve to complement our daily trading vibe. Good stuff, and very consistent with the Minyan mojo.
- The toughest fades are typically the best fades, to your opening point, but "catching cusps" is a tough way to make a living. That's why risk definition is such a critical component of any trading (or fading) strategy.
- I don't think you're the first one to wonder if 99.99% will get the "do over." In fact, that's prolly why the new bankruptcy laws were put in place a few years back. Remember, they serve to protect corporate America rather than the consumer. Shocker, eh?
- The fear of missing typically leads to financial remorse. Ergo, "going along to get along" is a short-term fix, at best, and a recipe for disaster, at worst. NEVER base financial decisions on an attempt to keep up with the Dow Joneses. We've seen that movie before and while the plot is sometimes compelling, we know how it ends.
- Most everyone, everywhere, is living in debt. In fact, on the aggregate, total debt is upwards of 350% of GDP. This is-and has been-a historic chasm between what's earned and what's owed. That trap door will one day shut and when it does, the "missing the punchbowl" angst will morph into "financial integrity" pride.
I hope this helps. Thanks, my friend.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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