First on the subject of value… the US dollar is poor value and current events in the US Congress and Senate may pull the trigger that cause currency parities to adjust the greenback down.
There are so many ways to spot value and you… as a unique individual to have insights to value that know one else knows.
For example Merri and I lived and worked with this Ecuador yatchak for years and learned some facts about plants that encourage natural health.
This experience and our concerns over what the US administration, Senate and Congress will do to health care led us to clear some inexpensive north facing mountain land.
This will be our medicinal garden… filled with nature’s wonders that help the body. The process of growing by the way helps the soul.
Those are our unique experiences… the shaman… understanding the value of cheap north facing slopes in Appalachia and enjoying playing in the dirt.
Here are the 7-11 rules that can help you apply your unique abilities to spot value that is useful in your life.
What to Know
#1: Markets are ruled by supply and demand and in long term are predictable.
#2: Markets in short term are ruled by emotion and cannot be predicted.
#3: Periods of high performance are followed by periods of low performance and vice versa.
#4: Cheap (good value) investments outperform expensive (poor value) investments.
#5: Investments in established up trends offer greater immediate opportunity.
#6: Investments with high and rising earnings outperform investments with low and falling earnings.
#7: Good value, high quality stocks with rising earnings that have gained attention from the market are the most likely to appreciate.
What To Do
#1: Know that we know less than we think we do and that’s OK.
#2: Listen to those who disagree. Expand horizons.
#3: By wary of the thundering herd. Truth is not created by repetition of an error.
#4: Avoid what is traditionally safe. Fashion reduces value and if you opt for certainty, you will die anonymously.
#5: Don’t care too much about daily volatility.
#6: Don’t care too little about strategy that suits your own abilities, wants, needs and desires.
#7: Don’t count on extraordinary returns.
#8: Do not underexpose (don’t make too many short term decisions and not enough long term decisions) yourself for the long term.
#9: Invest in what you know.
#10: Look for contrasts and trends that create value.
#11: Accept that risk is your partner, embrace it, adapt and bet on growth.
Every person has his/her own unique way of spotting value. Here is an example.
How an Engineer Earned 1.25 Million Air Miles By Buying Pudding
Excerpts From gizmodo.com (See link to Gizmodo article below)
The king of all virtually free travelers is one David Phillips, a civil engineer who teaches at the University of California, Davis.
David came to the attention of the wider media when he managed to convert about 12,150 cups of Healthy Choice chocolate pudding into over a million Air Miles. Ever since, David and his entire family have been traveling the world for next to nothing.
His most famous endevour was back in 1999 when he saw that Healthy Choice was having a promotion on their frozen entrées section. The offer was as follows: for every 10 bar codes of their product a person sent in, they’d be awarded 500 Air Miles. However, the company had an early bird stipulation that people who redeemed the offer within the first month of the competition would receive double that, meaning a person could potentially receive 1000 Air Miles for buying just 10 of their entrées.
After some legwork, he found what he was looking for- a discount grocery chain that was selling individual chocolate pudding cups for 25 cents each. This meant that for a measly $2.50, he could get 1000 Air Miles.
Realising the amazing return he was potentially able to receive, David set out to hit every store in the chain in one day and buy up every single Healthy Choice pudding they had.
All in all, David spent just over $3000 on pudding, which may seem like a lot, until you realise the total dollar value of the miles he was set to receive was in excess of $150,000.
However, before that, he actually had to send off all of the bar codes.
David approached the local Salvation Army with an offer; if they gave him a bunch of volunteers to peel off all the bar codes on his pudding, he’d donate the pudding to them. But here’s the beautiful part, doing this counted as a considerable charitable donation, which let David claim just over $800 back in tax deductions at the end of they year.
This is a really unusual example of how to spot value. The point is that we can each spot value in our own unique way when we focus our investing strategy around what we know.
For example, Merri and I despite continual global travel have also almost always be involved in buying old houses and fixing them so they offer better value. So when the US property market, was rising so high putting the US economy and US dollar at risk, we invested in fixer uppers in Ecuador. Then as real estate prices in the US crashed, we gained profits in Ecuador that we have plowed back into really good value real estate.
When the recession hit the US and the banking system was at risk, we were heavily invested in Swedish and Danish kroner. We always try to stay out of step with the masses… but in fields where we have experience.
Your experience, whether it be in groceries, travel, pudding cups or wherever life leads you… creates clear spots in the mirrors that reflect the future.
Focus on the sweet 7-11 rules of finding value and whatever happens to the US economy and dollar in the months ahead… you’ll be better able to survive and prosper from the shifts.
The first day of out October 4-5-6 seminar will look at how to spot currency value. The seminar is filled up but this is such a time of risk for the US dollar that we have shifted the venue to a larger meeting room and have space for a few more delegates. See details below.