Sometimes, when I’m listening to a person, I feel like I’m moving in slow motion. Maybe it’s not physically true, but I feel like my brain isn’t following along fast enough to pick up the importance of everything being said.
For several days last week, this was certainly the case.
I blame George Gilder.
He started it.
We finished our Irrational Economic Summit in La Jolla last Friday. At breakfast on the final day I realized I’d spent less than 45 minutes outside the hotel, even though the views are gorgeous (overlooking Torrey Pines golf course and the Pacific Ocean) and the weather was California-perfect.
The reason I stayed inside was because there was just so much to learn.
On day one (Wednesday), Harry and I presented to the group, laying out our views of where we are and what’s to come. Then we heard from George Gilder, the old Titan of Technology.
He has a new book out, Knowledge and Power, in which he defines how economies and power can shift as quickly as people can change their minds. During his talk, he outlined his views on technological innovations and what lies ahead as we progress through a knowledge-based global revolution.
It was fascinating!
And it was on purpose.
His point was that innovation and information will propel us forward at a much greater pace than we expect, dispensing power with the knowledge.
On the second day we heard from Adam, our investment strategist. Adam discussed the differences between cyclical investing and trend investing, rational and irrational markets, and simple versus complex systems.
His overall theme was that investors can capture outsized returns by following trends and being flexible enough to rotate their investments among sectors when they show different levels of strength.
It doesn’t have to be a terribly complex system.
Just like George Gilder, Adam clearly illustrated that investors can, and should, be purposeful in their stock selection and their holding period. They shouldn’t simply rely on an overall rise in the markets to generate wealth.
The day continued with Eddie Speed explaining how to invest in discounted notes on homes. This is a new area for many of us, because it specifically is not about buying homes.
Instead, as Eddie pointed out, you buy the mortgage itself and you become the bank. This keeps you at arm’s length from the property and gets rid of the late night calls about plumbing that are a landlord’s nightmare!
Eddie boiled it down to one thing – buying mortgages at a discount all centers on pricing the purchase correctly.
The information kept flowing, with Doug Lodmell giving insight on asset protection… and Phil Anderson explaining his views of real estate cycles.
Another highlight was the presentation by Dr. Lacy Hunt of Hoisington Investment Management. Lacy continues to show anyone willing to listen why the debt situation in the U.S., as well as the world, will act as an anchor on growth for years to come. This will profoundly affect economies and investments along the way.
Taking a cue from the speakers, I reflected on the information we received and the knowledge gained over the three days and made a couple of interesting observations.
The first is that I need to listen more quickly. I’m not sure how I’m going to do that, but I think I’ll start by reviewing the audio recordings of the meetings. You can get your copy here.
The second is that our job as individuals is to take responsibility for, and control of, our financial futures.
We need to do things on purpose.
We should critically view every dollar we control, every investment we hold, in terms of what purpose they serve.
Are we holding stocks that don’t fit?
Have we done enough to move at least partially away from traditional stock and bond markets to increase our returns and lower our risk?
Have we reviewed our business plans and even family plans in light of how our economy is most likely to unfold in the years to come?
If you have the nagging feeling that the answer to some of these questions is “no,” then there is work to do!
The end of the year is coming. It’s a typical time for people to take stock of where they are, where the nation is, and what might lie ahead.
Gaining insight before such a comprehensive review is critical to making good decisions for the year – and years – ahead. Our Irrational Economic Summit was well-timed this year… even if it did go by too quickly.
P.S. You have limited time to secure your copy of the Irrational Economics Audio. Less than eight hours in fact. Do so now, before it’s too late. Click here.
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Ahead of the Curve with Adam O’Dell
I meet all talk of overvalued markets with a mantra I learned early in my trading career. That is: price is price is price.