bearfund

Financial Crisis: Getting Old

I would happily buy if I could be convinced that gearing up 30x on ultra cheap money were a sustainable business model. Yes, a lot of financial companies are cheap to book. But what's the business look like? How would these companies do in a gold standard regime? How would they do in a full reserve system? When we do fundamental analysis on non-financial companies we look at their business, how robust it is, how well it would withstand shocks. We use conservative estimates and take nothing for granted. Well, the same approach for financials is a full-reserve, gold-based system. Not one would survive. You want to trade them, fine - I'm right there with you. As investments, they're all worthless, dependent on a corrupt and hopeless monetarist system for their continued existence. The worst thing an investor can do is look in the rear view mirror when choosing companies; the central banking, fiat money, fractional- (or no-) reserve system is in that mirror. What do you see out the windshield? As always, it's frosted glass. Winners see the worst and buy into those who will survive that and thrive on it. Losers assume it's a lot like what's in the mirror.