Shortly after college, one of my former roommates who majored in finance studied and successfully passed his Series 7 exam, which meant that he was now free to peddle securities to uninformed dolts such as myself.
My first purchase from this newly minted securities broker and soon-to-be-former friend was 1,000 shares in an oil and gas exploration company, which was listed among the penny stocks.
The company’s prospectus listed a number of promising drill sites that ultimately produced greater yields of iron pyrite than anything valuable, and thus, I was able to claim my first stock purchase and my first tax write-off all in the same year.
I’ve learned one or two things since then — my detractors insist that I shouldn’t put the number any higher than that — and now own just one security, which I dare label as virtually recession-proof. Hint: Its trademark is a pair of large golden arches.
Apparently my disastrous portfolio should have been viewed as having “long-term perspective.” At least that’s the perspective of the nation’s chief executive who tried to assuage nervous investors that they should focus on the longer term as opposed to worrying why the Dow Jones has dropped about 25 percent since Election Day.
The massive sell-offs have left stocks in the S&P 500 valued at their lowest levels since 1986. Yet President Obama compared the market activity to tracking polls in politics and their daily fluctuations. Concentrate too much on that he warned, and there’s a good chance you’ll get the long-term strategy wrong.
May I respectfully point out that the markets are not fluctuating. That would entail them displaying ups and downs.
Mr. President, stocks are in fact plunging.
And the markets cascading like Niagara Falls in mid-summer are not quite comparable to a tracking poll, where one’s popularity as a candidate may fluctuate from Peoria to Orlando.
The president insists that the falling share prices constitute investor bargains for those imbued with that long-term strategy. But my sense is that if his administration keeps floating polarizing plans such as mortgage bailouts, continually subsidizing bankrupt financial and auto hulks, and setting imposing tax rates that discourage investments, then my guess is he’ll see a lot more fluctuation over the coming months.
While we’re at it, I've got a tip on this little oil and gas company. Think of it as long term.
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