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HOW TO MAKE LOTS OF MONEY…

1. Know your history and current events.
2. Take one excellent course in micro and macro economics
3. Remember economics is as close to a science as social studies ever got.
4. Learn as much as you can about Black Jack; it is excellent study of investor sentiment.
5. Never use options, hedges or anything too fancy. Universal life insurance is forthose under 18 only. Term life insurance should discarded (if you are NOT near death) by age 50. Annul the word annuity. In GOD you should Trust; however, if possible avoid other types of TRUST. (Lawyers and their kin take a large slice.)
6. There is NO such thing as GOODWILL. There exist only tangible assets that depreciate. (Emergent properties and evolution do not describe any actual events. There are two proper terms for the real processes: adaptation and synergy. Economies of scale exist, but they are as rare as unicorns.
7. YOU need $200,000 to buy individual munis, and you can buy up to four insured AAA bonds.
8. OWNING LAND IS GOOD; owning buildings is bad. UNLESS the buildings on that land are houses or barns in which your family lives in or uses for storage is risky. owning buildings is bad. As a boat is a hole in the sea in which you pour money, commercial real estate is a hole in which you pour even more money.
9. DO NOT INVEST IN YOUR PROFESSION. DO NOT BUY COMPANY STOCK. A PHYSCIAN SHOULD OWN HIS INSTRUMENTS, BUT NOTHING ELSE. DIVERSIFY!
10. TRY FIND INVESTMENTS WHICH ARE LESS DEPENDENT ON PSYCHOLOGY THAN ON TANGIBLE ASSETS.
This is the first time in since the middle 19th century that bonds have beaten stocks. MY view is that this will continue for at least three more years but eight more years is also reasonable ( 1980 to 2014 or 2019). 1981 marked the initial appearance of the devil (REAGAN) and his voodoo economics. Bush the first continued this path as did Clinton. My fortune was built on the errors of these three. Bush the second set back my peers: they lost, I gained, both in a relative and absolute sense. Obama cannot fix any of this: he lacks the will, the economic acumen, and the political base to do it.

The world is not as it was in 1917, nor in 1929, nor in 1974; people have other places to go besides gold or dollars. My dear reader, you need to realize that the defense department is just another welfare state program. I realized that defense spending is no different other transfer payments (e.g., welfare). Sales taxes are regressive. Lotteries are regressive. Social security is a refined Ponzi scheme. I knew all this in 1980. And no, the government of these United States cannot keep printing dollars. (Bill Gross dumped his Treasuries for this very reason). Investors will, at the first sign of late hours at the mint, bail out. Misery loves company; the euro zone, devastated Japan, and bloated China either know or will soon learn the lesson that Iran taught us thirty years ago. Hard currency buys anything that the Koran demands; however, wavering currencies provide nothing except high interest rates. The divine Koran is an excellent economics text.