Wednesday, December 10, 2008

This Is The End

No, not of the world economy. Many of you may have already assumed this was coming, but here it is- this is the end of any sort of consistent posting on this blog. It has been a great experience and I loved doing it, yet it is time to start attending to other matters. I thought I would finish with some brief closing thoughts.

The recession has now been going on for one year now, and people are worried. To some extent, there are valid reasons. In the short term, we are looking at an economy which has been built up on years of excess corporate greed and fundamental imbalances. A similar situation is faced around the world, and investment risk aversion is at extremes in the markets.

So be it. Prices today would have you believe that humanity can not settle its problems and move forward. It is predicting human ingenuity will all of a sudden ground to halt; that the world has plateaued, and in fact, will have to actually recede from levels experienced which must have been too high. I think such beliefs are ludicrous. The markets may be rattled, but citizens will get through this crisis with much less fear and panic thanks to a social system with security and safety nets. And more importantly, an amazing thing is happening today in the world. More people are being educated, exposed to ideas, and put to work, than ever dreamed of before. That is billions of people thinking creatively and progressively, wanting a better lifestyle. And I'd bet that their desire and perseverance will create a safer, and wealthier, system for themselves and humanity.

For investors in corporate America, that is terrific news. But prices today are caught up in the current fear. Not only do they not reflect this long term potential, but in fact they actually assume a doom-like future. The choice really comes down to one of opportunity cost- either you can put your excess money under the couch or in government bonds, where it will be sure to earn you nothing; or, you can put your money to work into business and likely make significant returns on the back of long term global prosperity. I'm strongly in favor of the latter.

4 comments:

Zach said...

Any reasoning on leaving?

Anonymous said...

I really enjoy the blog and learn a lot from it. Hope you will continue.

Anonymous said...

This is a comment from other people:

If you would like to become a worldly investor, I highly recommend reading Nick Nejad’s, Rational Angle Blog. Nick is a student at the University of California at Berkely and a contributor to the Reflections on Value Investing Blog. Nick also runs the Buffett Fund which has outperformed the S&P by 8 points since its inception in 2006. Nick is well on his way to becoming a super investor of Graham and Doddsville

Nnejad said...

Thanks, those comments really means a lot to me. I will continue posting occasionally as I find things pieces of merit, but I will hope to keep it short and simple. Maybe that is for the best- I'll strive for more quality in every word that's chosen.

As for the reason on leaving- a professor of mine once joked that he was weary of anyone who blogged incessantly. Looking with hindsight, I see what he means. Blogging is a time consuming affair, with many articles easily taking 2 or 3 hours just to write up. Well in a typical day, I like to complete my work, research, read, work out, pursue some hobbies, and then get out into the world and interact. Unfortunately, it seemed to always be the last one that was being sacrificed every time I wrote something up.

So, for now, I am going to take it a little easier. I can only hope you find what I do still put up as worthwhile as before.

Regards,
Nick