Convincing Investors Not to Sell

My favorite piece of stock market advice is a corollary to the first rule most people learn – buy low, sell high.

But then the question comes, What if the price doesn’t go up?

So my favorite piece of market advice is, In that case do not have bought. I understand the math.

I heard on NPR yesterday an investment adviser. What should an investor do? The reporter asked, Is it time to get out?

Before the stock adviser verbalized an answer, she privately laughed at the question. Some of the laugh leaked out, and it told a little story by itself.

She said, oh no, it already much too late to sell.

Did we hear the reporter swallow hard?

As for why it is too late, that is because you never know when the turn-around will come. That is what she said. She said that the market price anticipates the economic recovery by six months or so.

So if we accept that six month idea, and imagine that this is the bottom – then we would be thinking that recovery is set for about six months out from now. So we would buy now, low.

But, is the recovery six months out? I think that from the point of view of those who were sold on the idea that the poor economy is mostly the result of an image problem, that the idea that six months from now the economy will be recovering is looking, more and more, less promising.

Let’s look at the fundamentals, as they say. But, since looking at their idea of the fundamentals obviously hasn’t done a lot of them a lot of good, let’s look at a different set of fundamentals.

Since about 1970 the rich have been getting richer and the poor have been getting poorer. The social disparity between the position of the rich and that of the poor has been getting worse for over a generation. This is fundamental.

Another fundamental is the huge piece of our budget sucked up by the military-industrial-academic complex, in all its projects and intricacies. This after nearly everyone predicted that there would be a great peace dividend after the disintegration of the Soviet Union. I subscribed to several of their trade journals at the time, and distinctly remember a featured editorial pointing out the the impending peril to the aerospace electronics industry. Very matter of fact, with no trace of compassion for humanity at large.

Military production is not only production that produces none of humanity’s daily needs: It produces bads, not goods. (I am impervious to the idea that today’s military spending is in any measure some kind of actual defense. Today we need defense from the military related conglomerations and cohorts that have attached themselves to the public trough, claiming it as their own, pooping all over the place at the same time.)

Intelligent people see that what goes around comes around. There are natural principles involved. Einstein’s comment that we cannot at the same time prepare for nuclear war, and also prevent it, says it all. It goes for all levels. That’s why we teach our kids not to fight with each other. It is absolutely fundamental.

Now, in the highly industrialized society in which we live, as more and more people are drawn away from the forms of primary production that come naturally to the human race, into more highly elaborated social and cultural contrivances, with associated social niches, the whole thing becomes much more fragile as its complexity grows beyond human comprehension. It becomes unable to make an orderly retreat to more fundamental forms. The higher-order complexities of the social order decay. It stinks. That is what we are smelling these days as the radio issues reports on the economy.

Is globalization of industrial production viable? How does the recent wide-ranging integration of global economies factor into the current situation?

Can an empire gain full spectrum dominance of the globe? If it could, would that be a good thing? Some people want to know the answers to these questions. There is only one way to really find out, and they are trying their best to manifest an answer by trial and error.

Can a country founded upon constitutional democratic ideals be successfully converted to an imperial system? What degree of hypocrisy, sham, cynicism and irony must be present before someone mainstream dares to speak the obvious?

The media was told a year ago that to point out the crash is to cause the crash, so your middle-class investor, the one trusting investment advisers, does not appreciate the situation.

Are the advisers “in”? Do they wish to be out. “The queue for the lifeboat is forming behind me.” But she doesn’t have to say that, because the small investors didn’t get the message that the ship is sinking.

Among investment advisers, who really believes that next month will be better than this month?

Stop the damn wars. Stop manufacturing the means of warfare. Quit selling our kids’ future for filthy lucre. Then, or six months later, I’ll bet things start to pick up.

Comments are closed.