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Breathless (Gasp!) Investing
by Ross Hansen
CEO, Northwest Territorial Mint
Remember the Cold War era – when those supposedly in the know told us we had to buy up gold and silver because the Russians were going to nuke us into the Stone Age?
Ah, memories. Can you name any other events of the past half-century that panicked some investors into wild and irrational behavior? Here’s just a few…
1. Two oil jolts in the 1970s spawned two straight years of double-digit inflation during the Carter administration. No surprise, then, that gold hit $850 and silver reached $50 in 1980!
2. Then, foreign policy cowboy President Reagan faced down the Soviet Union’s Evil Empire. Expecting that nuclear Armageddon was soon to come, many frightened investors scurried to buy silver and gold.
Communism collapsed and uncertainty reigned in the time that followed.
3. The first Gulf War resurrected fears of the end of civilization.
4. Y2K conjured up anxiety that the world’s computers would grind to a halt on January 1, 2000, and millions squirreled away precious metals, food, and weapons.
5. The attacks on 9/11 created panic everywhere.
6. Gulf War (again).
7. The dollar tumbled (again).
8. Oil prices soared (again).
9. Inflation (again)…
Surely other events come to mind. My point is that something is always happening that drives people, wide-eyed in terror, to pick up the telephone, empty their safe deposit boxes, or climb into a hole in their back yards.
And when that happens, out come the carnival barkers: “Hurry, hurry, hurry. Step right up!”
You know who these people are. They’re the ones selling you a solution to a problem that would normally take you only two minutes to figure out for yourself — that is, if they weren’t shouting so breathlessly that you need to “Do it now, now, NOW!” They’ll remind you about missiles in Cuba, claim terrorists are at the ticket counter, and shriek of the certainty of calamities to come – from toad extinctions to missing Russian nukes. They’ll tip open their magic hat and pull out a massive conspiracy that unfairly holds down (or shores up) the price of [insert name of whatever-market-they’re-in here]. They freely share their information on all the evil people, corporations, governments, or cartels that have plans to corner the market in concrete, shoe polish, chewing gum, or… you name it.
“Step right up, friends,” says the barker, “and view how our once-beautiful economy – the envy of all nations – has become a hideous creature to be feared and loathed.”
“But you can protect yourself,” the barker consoles. “Buy gold and hide it before the government sends thugs to your house and takes it from your children. Buy silver and stash it away before it disappears from the face of the earth like the dodo and common courtesy.”
And over there, on the other side of the investment carnival Midway, are those hawking the opposite view: “Sell, sell, sell your metals now, before they totally lose their value!”
Now, please don’t get me wrong. Considering your circumstances is always wise. You might live near a geologic fault line, or in a state prone to tornadoes, or on a coastline targeted by hurricanes. Preparing for the worst case is always prudent, because, eventually, something bad will happen – and it may be something you cannot even predict. You don’t need to make a special trip to buy your emergency preparedness kit. You just need to remember to get the bottled water, canned food, battery-powered radio, flashlight, and batteries the next time you go to the store.
Remembering the past can help predict one thing for sure – the carnival barkers will always be out there selling something. Just take the time to understand the information you’re being given. If it’s being delivered loud and fast, look for gaps in the logic. Ask questions. Does it really make sense that Tuesdays after a solar eclipse in the winter of odd-numbered years are the best time to make an investment? Look behind the curtain. If the barker won’t let you see what’s back there, perhaps nothing is there at all.
So, before you pass your pocket change (or more) to the carnival barkers of the investment world, feel free to take a breath… relax… chill. Then, buy when it makes sense for you.
by Ross Hansen
CEO, Northwest Territorial Mint
Remember the Cold War era – when those supposedly in the know told us we had to buy up gold and silver because the Russians were going to nuke us into the Stone Age?
Ah, memories. Can you name any other events of the past half-century that panicked some investors into wild and irrational behavior? Here’s just a few…
1. Two oil jolts in the 1970s spawned two straight years of double-digit inflation during the Carter administration. No surprise, then, that gold hit $850 and silver reached $50 in 1980!
2. Then, foreign policy cowboy President Reagan faced down the Soviet Union’s Evil Empire. Expecting that nuclear Armageddon was soon to come, many frightened investors scurried to buy silver and gold.
Communism collapsed and uncertainty reigned in the time that followed.
3. The first Gulf War resurrected fears of the end of civilization.
4. Y2K conjured up anxiety that the world’s computers would grind to a halt on January 1, 2000, and millions squirreled away precious metals, food, and weapons.
5. The attacks on 9/11 created panic everywhere.
6. Gulf War (again).
7. The dollar tumbled (again).
8. Oil prices soared (again).
9. Inflation (again)…
Surely other events come to mind. My point is that something is always happening that drives people, wide-eyed in terror, to pick up the telephone, empty their safe deposit boxes, or climb into a hole in their back yards.
And when that happens, out come the carnival barkers: “Hurry, hurry, hurry. Step right up!”
You know who these people are. They’re the ones selling you a solution to a problem that would normally take you only two minutes to figure out for yourself — that is, if they weren’t shouting so breathlessly that you need to “Do it now, now, NOW!” They’ll remind you about missiles in Cuba, claim terrorists are at the ticket counter, and shriek of the certainty of calamities to come – from toad extinctions to missing Russian nukes. They’ll tip open their magic hat and pull out a massive conspiracy that unfairly holds down (or shores up) the price of [insert name of whatever-market-they’re-in here]. They freely share their information on all the evil people, corporations, governments, or cartels that have plans to corner the market in concrete, shoe polish, chewing gum, or… you name it.
“Step right up, friends,” says the barker, “and view how our once-beautiful economy – the envy of all nations – has become a hideous creature to be feared and loathed.”
“But you can protect yourself,” the barker consoles. “Buy gold and hide it before the government sends thugs to your house and takes it from your children. Buy silver and stash it away before it disappears from the face of the earth like the dodo and common courtesy.”
And over there, on the other side of the investment carnival Midway, are those hawking the opposite view: “Sell, sell, sell your metals now, before they totally lose their value!”
Now, please don’t get me wrong. Considering your circumstances is always wise. You might live near a geologic fault line, or in a state prone to tornadoes, or on a coastline targeted by hurricanes. Preparing for the worst case is always prudent, because, eventually, something bad will happen – and it may be something you cannot even predict. You don’t need to make a special trip to buy your emergency preparedness kit. You just need to remember to get the bottled water, canned food, battery-powered radio, flashlight, and batteries the next time you go to the store.
Remembering the past can help predict one thing for sure – the carnival barkers will always be out there selling something. Just take the time to understand the information you’re being given. If it’s being delivered loud and fast, look for gaps in the logic. Ask questions. Does it really make sense that Tuesdays after a solar eclipse in the winter of odd-numbered years are the best time to make an investment? Look behind the curtain. If the barker won’t let you see what’s back there, perhaps nothing is there at all.
So, before you pass your pocket change (or more) to the carnival barkers of the investment world, feel free to take a breath… relax… chill. Then, buy when it makes sense for you.
0
Comments
sells the metal.
they are just using reverse psychology because their old emails
using that technique have been flopping lately.
the whole point of the email is for the reader to think, gee, what
a nice read from a kind gentleman. i will probably remember his
company when it comes time to buy...
roadrunner