Friday, May 27, 2016

Faber Atrocious Asset Allocation Advice

Marc Faber is brilliant, a self-made small-business big money guy, advising and getting it right again and again.  He is a bit older than I, and so he knows well the way it was.  It's appalling how degreed adults have no idea of the way the world recently was. I actually endured a remonstration from an adult, a putative PhD,  who complained, without interest, who would ever make a loan, how would anyone ever get an education,  how could anyone ever afford a house?

Without Zyklon B, how would we ever do mass killings?  The things people allow themselves to be socially conditioned to think!

Well, there was a world before lending credit at interest, there was a world before Zyklon B.

Faber knows the old world and the new world, but he has specialized in playing the big money game.  He is not interested in the world of shopkeepers and lifestyle-over-accumulation.  So his best advice right now is:
He believes that all investors should be diversified  along the lines that he personally prefers:Real Estate (25%)Equities (25%)Cash and Bonds (25%)Precious Metals (25%)
Yikes!  Keep your fruits low hanging for the hegemon to conveniently pluck?  Surely his advice is excellent if you have accumulated much and want even see gains, yet be well hedged.  For those who are socially conditioned to believe in accumulation over lifestyle, that is the ticket.  Now most people, especially in USA, even if dirt poor, "believe in" accumulation over lifestyle.  The more the better.  Never mind the range of goods and services called forth by those who are socially conditioned to accumulation are diametrically opposed to those who chose lifestyle over accumulation.  Think "livin la vida loca" vs "livin la vida Buddha."

At the Wannsee Conference some Nazi officials were complaining the Romanians (I forget, but it does not matter to the point) were shaking down the Jews before the Nazis got ahold of them.  Heydrich advised the officials to leave the whoever alone, because they'd do a good job for themselves and later the Nazis could take it all anyway.

Who knows how and when this circus will flame out, and who cares, the hegemon will take it all anyway when necessary.  Manage your accumulation well!  The hegemon is depending on you to do your very best!

Instead of 1/4 of your assets in real estate, etc, how about 1/4 in pizza ovens, 1/4 in delivery trucks, 1/4 in a cows, 1/4 in heirloom tomato seeds (note everything can be moved).

If the hegemon gets to the point he takes that, it's over anyway.

Feel free to forward this by email to three of your friends.


Bill Carver said...

Love the term/concept lifestyle-over-accumulation! Made my creative and thinking brain activate and consider some content and products for a possible small business. Purchased the domain (without hyphens)for testing.

Anonymous said...

John are you still writing a finance book? When will it be published?

John Wiley Spiers said...

Finance in a post-capitalist world will be part of it, but the book is on radical small business ... radical in the sense of organic, authentic original. I'll probably use the word "authentic" anyway... I've cleared everything this summer to write it...

Anonymous said...

John, on page 87 of your book you wrote," organize around an opportunity not a resource." I think that this little nugget of wisdom could be extended to personal finance. The hegemon would have us to believe that all of our eggs should be in one basket
(i.e. stocks, bonds, CDs, etc.) because without this financial success is limited. However, investing in a well-run small business yields a far greater opportunity for financial success.

John Wiley Spiers said...

Drucker taught me "organize around the opportunity" ... but to add to your comment, running a small business well takes all of your being... which is a rather good thing to do with your being...


Anonymous said...

Drucker also taught "Entrepreneurs do not take risks" I think - which most people have trouble comprehending.