By John Reizner |
Consider that one may think of certain equities investors, who may possess the ability gained through education and/or long experience, to anticipate the probable long term future direction of the stock prices of individual companies or the stock market in general, as investors with both vision and conviction.
These investors may really possess a unique state of mind and use a set of tools expertly practiced which may lead to excellent results as money managers over successive market cycles. Can these individuals who consistently rank among the best money managers in the country over the long term be called "visionaries of stock selection"? Is such an idea outrageous?
And what is the nature of such economic knowledge and experience if it exists? Of course, when we think of visionaries, we normally think of great religious figures or artists, or just persons with unusual foresight or invention in his chosen field. I do not mean to compare equities investors to great religious figures - that would be absurd; however, consider whether great investors such as Warren Buffett or deceased mutual fund family founder John Templeton could be considered economic visionaries?
Two Stock Market Visionaries
Did these two investors in their investing choices and economic prognostications have the quality of foresight? My answer is that through their educations, hard work, long investment experience and impeccable track records, they have achieved this vaunted status. They have been founders and expanders of great investment wisdom practicing their craft with great expertise. Their work and some others like them have sometimes led to the creation of a great deal of material wealth and hopefully improved the lives of American families of all walks of life who invested with or like them.
The late John Tempelton and Warren Buffett consistently expanded knowledge about how to invest one's money to help protect one's material journey here on our planet. It is said that John Templeton began each of his meetings at his namesake mutual fund firm with prayer. Significant original contributions have been made by a short list of fund managers and investors to the book of knowledge and ideas about how to survive as an individual well beyond subsistence in a capitalist economy through being shareholders in publically traded companies.
In my book, A Way to Wealth: The Art of Investing in Common Stocks, I describe how many years ago I read and listened to interviews about the economy and the direction of individual stocks and the general stock market with such investors such as Warren Buffett and Bruce Berkowitz (after which I later bought Wells Fargo in 1993), Martin Whitman (MBIA, which I sold before the bulk of the stock market decline in 2008, and Peter Lynch and John Templeton in the early 1990's (Johnson and Johnson) when their preferences about individual stocks were made clear. I combined these investors opinions with my own personal research included in my book, to reach firm buying decisions which led to a high level of return on my investment. I should say that like many equities investors during the stock market Crash of 2008, my investing account declined markedly in value during that year's market swoon.
Why should we care whether some money managers may have great long term track records, and that they may help us make money in equities? It is in the average persons' material self interest to improve his or her lot in life by work or also by making careful investment in equities or gold or silver, or other investments that may increase in value. Every year Forbes Magazine rates their mutual fund universe and gives each fund a grade for performance in up and down markets. This may be useful to some investors. The grade for equity funds in down markets is important, as the investor might do well to have some downside performance protection for his equity funds.
The task of creating long term wealth in the stock market was complicated by the 50% decline of the S&P 500 in 2008, when the entire financial system as we knew it was brought to the brink of collapse. U.S. equities have now recovered a great deal of their previous decline and have been rallying strongly into the early part of 2011. The Dow sits as of this writing at 12,062.26 and the S&P 500 rests at 1307.10.
The gold market, on the other hand, has been in a bull trend for ten years. Gold sits now at $1,351 per troy ounce and silver is at $28.81 per ounce as of this writing.
Granted, the end result of making good stock market investing decisions and having some extra funds at one's disposal may just mean having the cash to save for one's retirement. That money can also help provide for your children's college tuition or even be donated to charities. We do live in a capitalist society with all its faults - and capitalism may have been proven by history to provide the most for the largest group of people possible on the planet by an economic system. Mankind has not discovered a utopia yet. Without free enterprise, I believe that we would be back in the Dark Ages.
Our American society in particular idealizes the pursuit of happiness - the right to make of one's life what one desires and to keep its material and spiritual fruits as long as one does not break the law. We can all aspire to any level of the good life we desire - whether that be owning a home that is affordable to our means, having a family, doing work we love to do, getting involved in the community, or achieving a philosophical or religious plateau of enlightenment. It's a big world, and one has to survive somehow.
Since my last post, I bought two silver mining stocks, still maintain an international oil firm equity, a Canadian gas pipeline company, a railroad company and various other equities. I purchased a domestic equity benefiting from the rise in oil prices and also two restaurant stocks among a few other equities. In doing so, I have slightly reallocated out of the diversified equity fund investing throughout Asia and significantly reduced my position in the Franklin Templeton Hard Currency Fund. I maintain core gold and silver positions.