The bottom…are we there yet?
The quote of the century…
“ When there is panic, it’s the time to buy, when they are buying
it’s the time to panic.” This was said by the sage of Omaha who
only days prior purchased a huge chunk of General Electric.
Mr. Buffet isn’t new to the investing game. He’s been at for a
long time. Warren started with a small insurance sale office and
through use of a seldom used thing now days purchased the main
insurance company. How? elbow grease and long hours.
Now just one share of his company equals the gross national product
of Europe.
What are we to take away from Mr. Buffet’s success?
It’s a simple lesson learning from history and not have to repeat it.
Investing and ownership in companies has been around since before
Roman times. They had their recession/depression too. It was
monstrous and called the dark ages and it lasted for centuries.
Why? It was the same old story “something for nothing”, a quick fix.”
The lord of the manor sat back and let his serfs do all the dirty
work while he went about jousting. He went after dragons while
the serfs planted and harvested the crops. In return the serfs got
to keep, 2% of the pie, their families and the wood hut they lived
in. Meanwhile, the lord got his 98% of the take donating a tinny
part to the church of his choice of which there was one, take your
choice. This simple act would ease his conscious.
With his extra “earning” he could either losses it in a dice
game or invest it with an Italian who had his mind set on sailing
off the edge of the flat world to prove it was so.
Surprise, he came back with chests load ed with gold from the outer
islands of China. “
Well, they don’t look like Chinese to me.”
the Lord investor thought.
This is to good to be true and others thought the same thing…
The others formed in groups each investing their part of the pie for a
bigger piece of the pie. Let’s make this official and give each one of
us a piece of paper that says we each own a part of the larger pie.
“Whose going to watch after the paper?” they asked.
Someone answered,
“We’ll form a bank and they can hold the paper.”
The debate continued..
“What’s on the paper?
'Something catchy… how about in money we trust?’
"No that will never do!
Then how about 'In God we trust'?
Are you kidding? What about those that don’t?
Ok, then how about the words, Gold Certificate?
This was hunky dory and was so for quite a few years until one day
someone wanted his share of the gold, opps.
Guess what? Mr. Buffet’s quote could have been applied.
It was fear or panic in a big way, take your choice of verbs.
The game had to be rethought and in a hurry.
Now what? they asked.
"Let’s reprint new paper and call it silver certificates.
I mean silver grows on trees unlike gold.”Good idea.
What the heck people are now use to paper instead of coins of the realm.
Things went back to abnormal for a few years till some one wanted
their silver and once again it was a run on the banks…
Boys, we seem to have another problem! Anyone got a better?
“Sure do! We’ll build 7 huge building with iron bar on the window.
We’ll call the Federal Reserve and tell everyone we are keeping
the government’s valuables in them. Them we’ll reprint the paper and
call them 'Federal Reserve Notes’ We’ll tell everyone they are as good
as money.”
“No one is going to believe that old line it ‘s failed twice before.
Yes they will, here is the hooker, we reintoduce God once again.
How so?
We print on the paper,
“In God we trust.” Brilliant
So here we are today all looking for something for nothing.
Meanwhile, the world is holding onto Federal Reverse Notes with the
printing of
>“In God we trust on it.”em> But the question is, whose God? and whose printing press?
When the answer is elbow to use grease and long hours per the Sage of Omaha.
