31 August 2010

How Long Can You Hold Your Breath?

"If it's the end of the world, what do you buy? Canned foods, guns and the generators," said Keith Springer, president of Capital Financial Advisory Services. "There are a huge number of people who feel this is the end of the world." _WSJ
Investors seem to be investing for the coming doom-bama. Let's first look at the investments that are doing well. Then we will analyse the thinking behind the investing, and the wisdom of the thinking.
Amid the market tumult, a handful of stocks have seen their share prices ratchet up to record highs in recent weeks. And many of them are connected by a curious, if disconcerting, thread: Between them, they provide an investor with essentials for any respectable fallout shelter—makers of bottled water, canned goods, dehydrated broth, gas masks and auxiliary generators.

A portfolio of the 18 companies that reached their peaks in the past month would be up about 24% this year, compared with the broader market's 4.5% decline, a sign some investors may be taking the prospects of financial Armageddon more seriously than one might think.

..."This is a very unusual economic cycle we're going through—we haven't been through anything like it in any of our lifetimes, and we don't know how it's going to play out," says Dorsey Farr, partner at Atlanta-based investment advisory French Wolf & Farr. "We don't see where this economy is going, and some of the potential outcomes are frightening."

... _WSJ
So, 18 months under the Obama - Pelosi regime, and we are looking at the end of the world. You can't blame an investor for bidding up precious metals, guns, ammunition, and disaster preparedness supplies. Investing in "bunker portfolio investments" is fine as long as the monetary system is working. What if the system collapses when your portfolio is at its peak? How do you convert your stocks to useful tradegoods and survival supplies at that point?

But what does a person do when he sees the end of the world coming? You can get some idea at Preparedness Pro and at The Prepper E-Book. The basics: stockpile food, water, medicines, fuels for heating and power generation, beef up security, have fallback and bugout plans, etc....

But almost all of those preparedness and survival plans are the equivalent of holding one's breath and ducking underwater, to avoid a temporary danger. How long can you hold your breath before coming back up. And when you do come up, what are you likely to find?

Even if you have a perfect fallback plan to a defensible location where you will be able to grow ample food and have an ample supply of potable water, what happens if you have a type 1 diabetic in your family -- or someone equally dependent upon high-tech medicines or supplies? What happens if it's your bad luck to be located one county over from a would-be Alexander the Great, neo-conqueror of the collapsed lands? Or if you get caught between blood-thirsty rival gangs each seeking to expand their territory?

More likely, you will try to tough it out in the suburbs or in an urban apartment or townhouse. Perhaps you have stored enough supplies to get through a 1 month crisis. How many others in your city will have thought to do the same? It will get very bad in the cities under such conditions, and a lot of the things that can burn, will burn.

There is strength in numbers, as long as they are the right numbers. If you decide to hole up on a University Campus with professors and staff, you will be dead before you understand where you went wrong. Your cohorts in disaster need to be competent in the real world. That leaves out intellectuals, bureaucrats, and a huge number of other drags on the productive sector -- who have only been able to survive due to the astounding productivity of the private sector market economies (until the leeches succeeded in killing the private sectors).

You had better start planning, looking around, polishing your skills, and making connections with people who have complementary skills. People can only hold their breath for a short time, but if they are on board a nuclear powered submarine or a inside a nuclear powered underwater habitat, they will not have to hold their breath at all, metaphorically speaking.

Making good investment decisions -- investing to match the mood of the markets -- can help a person to build and conserve assets. But markets do break down from time to time, when put under too much stress. Hope for the best, plan for the worst.

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Blogger PRCalDude said...

But think of the excitement this will bring!

Seriously, though, there is no freedom of association anymore so finding the "right" people to cluster with will only bring you more problems.

Wednesday, 01 September, 2010  
Blogger Ugh said...

Since seeing a show on Discovery about the magnetic pole shifting - as it has done many times - and realizing that for a certain period of time the Earth's magnetism will not protect us from Solar phenomenon causing massive failures of the electrical grid and certain societal breakdown, I have for the first time made a list of what I need to have for short term (and bugout) survival.

Obviously such sky is falling type scenarios are as unlikely to happen in my lifetime as it would be to be struck by lightning, but it represents a situation one should at least think about and prepare for. Next question: how much ammo should I buy?

Thursday, 02 September, 2010  

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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