As I write this edition of Randolph Speaks I think about our Congress and the games they are playing. They are being paid to do what? I am unsure why we have them in office when they seem to not be able to make any decisions.
Judging from movements in the stock market, Wall Street is not taking the government shutdown and potential debt default seriously, betting that President Obama and the Republicans will make a deal at the last minute and avoid a fiscal collapse. In 1995-96, the Republicans caved into President Clinton’s demands. I’m still not sure who will blink first in 2013; both parties are digging in their heels.
The decision by the Obama Administration to shut down the national parks (even the thousands run by private firms without federal money), the monuments, and the government websites is childish. Isn’t politics grand?
Our stocks are holding up well during this latest crisis and they will continue to produce their product or service and adjust to the political environment as they need. It is imperative to remember that Wall Street is composed of companies which offer investors opportunities which they would not otherwise have. There will be times when the value of a company goes opposite of what the investor wishes. But the question becomes “Why is it moving in the opposite direction?” Once it is discovered what is causing this down turn then an educated decision can be made what is to be done.
A few months ago, after one of my speaking engagements, I had a young man ask me about a stock which I knew nothing about. I asked him why he should invest, what would cause him to sell his position? I pulled up the company on my computer and stated it looked like the stock had run up rapidly. Were there shorts on the stock? He had no idea what shorts were, or many of the facts needed to make an educated decision. I reminded him that when anyone makes a decision on a whim, it usually turns out not to be a good experience … but could still be a great learning experience.
Knowledge brings strength and confidence within our thought processes and allows comfort in knowing what we are doing. Think of the comfort you derive once you learn how to do anything: cooking, a sport, planting a garden, math, reading, etc. Once you have gained knowledge you become more comfortable in the process. You know you will make mistakes, but you can always improve from them. When I am investing I know that probably 30% of what I invest in will not do what I planned. However, I am unsure which stocks will not perform in the time frame I expect. Remember, stocks are run by people … and if they do not perform, a stock will not perform.
I close with saying that investment decisions must be based on facts, not the politicians who seem to be playing the childhood game of “King of the Mountain.”
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