Wednesday, December 24, 2008

Take a differing path to wealth. Question the Social Norm.

Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are even incapable of forming such opinions. - Albert Einstein


No mater how I try to explain it ... A stock broker or trader will not understand or "get" what I'm talking about when I say that there is to0 much money in the stock markets chasing to few companies of value. Over capitalized to the extreme. Maybe it is prejudices of the stock market environment or mentality.

Then to compound that failure to get it... The companies that do not pay the owners (no stock dividends paid out now or ever) are (in my opinion) a loosing cause to own. As if to say that if the business does not pay it's owners then why own them. And the Stock guy says "because I can sell the stock for more money in the future." AND I contend that the fact that there is a Next Bigger Fool does not make the company that valuable.

I feel that an asset needs to have a value and a cash flow that leads to the values. If the overhead, weather it be salary for overpaid executives in jets or the costs of a plumber for an apartment building, gets to high then there is little or no profit that year. But if you get the costs down and still get the revenues (rents) then you make money and the owners (or stockholders) get their share.

If a company is "Public" and investors buy those stocks to hold, why does it seem ok for them to pay employees more then they owners? Executive salaries that include stock and perks and golden whatnot's. And the Boards allow this?!? The general populous of America has been duped. We watch "Who Wants to be a Millionaire" and dream of the stock market carrying us off into retirement bliss.

Surprise! It was a House of Cards. House built on Sand.

If you want real security you really need a foundation that stays put. Buy some real Estate that is income producing like an apartment building and treat your tenants well AND they will pay you every month on the first.

If you want my help, call me, I'll show you how to make it pencil out.

Keith L.

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