Wednesday, August 13, 2008

"If only or could" or...

"better yet I could do it better than X." I heard this sort of sentiment routinely while working at Firm X during the tech boom. Everyone including the stray cat thought they could out fox Wall Street. If they could just get access to after hours trading, if they could just get access to more money to plow into tech stocks. If they could watch more CNBC.

Everyone fancied themselves as an investment whiz. Until the bubble burst and all these "daytraders" these tech geniuses lost the entire balance in their E*trade account if not their house. It did not matter if you were a well educated neurosurgeon or a hard working middle level manager or a factory worker - the market won and won big time.

Today I was reading the Wall Street Journal from this past weekend. There is an interesting article about "distressed debt" (Vulture Investors Won't Have It Easy.) I was shaking my head. First of all "distressed debt" is NOT an investment it is a gamble. It is speculation. It is not a vehicle for funding retirement.

I would submit that most of us do not have the excess capital nor the know how to play in this areana - nor should we.

Part of the problem with Wall Street is we as a society have lost focus. We are all about quick bucks and fast profits. There is no Investment anymore. No forethought. No thinking about what is best for everyone - and not just the the executive committee & shareholders (the largest ones anyway.)

The best way to be prepared for the future is to plan. To have a plan and stick to it. I am not saying park it all and let it ride - but I am saying that the time invested should be on careful forethought and careful planning. Chasing the next quick dollar sign is a race that I will gladly lose.

Just like with ingredients on the food label - if I cannot pronounce it - I will not eat it. With my investment decisions - if I cannot wrap my head around it - I will not buy it!

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