IMPORTANT EXCERPT:
What brings me closer to a visceral understanding of this crisis is the half century I shared with my father, J. Irving Weiss, one of the few economists who not only advised investors during the First Great Depression, but actually predicted it.
Here are your tasks in a nutshell:
Your first and most urgent priority is to survive the depression, while building the biggest pile of CASH you can. Whether it's a molehill of pennies that you pinch from daily sacrifices or a mountain of dollars you squeeze out of asset sales, the more cash you can accumulate now, the better.
Your second priority is to make sure your cash is in the safest place possible. That may not be the nearest bank or the biggest insurance company. Short-term Treasury securities, despite their low yield, must be the primary vehicle.
Third, for the duration of this crisis, plus any new ones that may strike, your best friend and companion will be patience.
Don't yield to the temptation of so-called "bargains" and "big discounts" from peak prices. Many of those peak prices were a fiction from a bygone era that may never be seen again in my lifetime or yours.
Don't jump in too soon. You can afford to wait. Indeed, just by waiting patiently, you can build wealth tremendously.
Fourth, I recognize that not everyone is able to follow all my instructions to the letter.
You may have real estate you cannot sell or a pension fund beyond your control.
You may have bonds that have no market or a business that continues to provide income.
All could be assets that you must keep; and yet, at the same time, all are assets that could be vulnerable to big losses in a continuing decline.
To untie that knotty dilemma, you may need a hedge — a protective shield that can help offset your losses. Alternatively, if you are a risk-taker, those same hedges can be turned into pure profit opportunities during a market decline. I hope you have already read and acted on the guide to hedging I sent you a while ago. If not, the latest rally in the market gives you a great time to start. ( Click here to download the pdf file.)
Last, the big pay-off will come when we hit rock bottom and it's time to buy the greatest bargains of the century. So recognizing the bottom can unlock the opportunity to boost your income, allowing you to buy some of the best assets in the world for a pittance and stake out the high ground for yourself, your children and generations to come. I will do my utmost to alert you when the time comes.
Just remember that nothing is predetermined. Right now, the tsunami of crisis seems unstoppable. But in the foreseeable future, there will also come a singular moment in time when the worst of the storm has passed and the tides of history have ebbed, opening a window for you, me and our leaders to choose our own destiny. Before then, let's have a serious discussion about what the best — and worst — choices may be.
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