Taking Risks and Reaping Rewards

Basically, It's Over...Or Is It?

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Warren Buffett, the Oracle of Omaha and the second richest person in the world, released his annual shareholder letter recently.

This is required reading for any investment professional. They already know that.

You should read it too. But assuming you won't, I will try to summarize the salient points from which you can learn and apply to your own situation.

In case you aren't aware Mr. Buffett has a partner and consigliere in Charlie Munger.

And that's where we'll start.

Mr. Munger's sharp mind has been written about for quite sometime as he clearly sees through the fog and cuts to the chase. His recent article entitled, "Basically, It's Over" isn't to be taken lightly. 

Again, THIS IS MUST READING for anyone concerned about the world around us.

He calls it a parable about how one nation came to financial ruin. Clearly this as a warning shot across the bow of our current economic brouhaha.

Pessimistic? Yes.

Too pessimistic? Maybe.

Clearly on point with a valuable message? Duh! Of course.

Expect nothing less from Mr. Munger.

Here's here's a quick take on this:

• People with a vested interest don't care about much else. It's difficult to fix our problems because to do so would impact the profiteering of someone else. To protect those profits, they make political contributions to prevent the fix. Hence, same old, same old. Which won't work forever, because...
  
• Avoiding trouble doesn't make it go away.  Our health care situation is untenable long term as is our fascination of short term "casino" profits over long term wealth creation. But...
• This can go on for a long time. We won't collapse overnight, again. We almost did that just a short time ago. So we have a bit of time until it will happen again. However we are clearly still speeding toward a cliff. If we don't change our course...
• It will very likely will come to a sorrowful conclusion. The longer we continue on our current road, the more painful the conclusion will be. And if course isn't going to change, you need to...
• Make sure you aren't sorrowful when it concludes. If leaders won't listen to BenFranklin LeeKwonYou Volkker (read the article to understand this reference), they aren't going to listen to you or me. So your best move is to stay abreast of the situation and use our understanding of it to your advantage.

(Warning... this requires real work - actually reading and thinking. If you are out of practice at either, now is the time to start training.)

So is it basically over?

Clearly not for Mr. Munger or Mr. Buffett. 

I am doing what I can to make sure it's not over for me either.

Hopefully, it won't be over for you. But that depends on you.(Did you read the article yet? Again, work required. You might want to start there.)