Few investment legends have weathered more than Richard Russell. Born in the Great Depression, Russell knows what it’s like to live in hard times. And in this new normal he has some survival tips. The following are courtesy of Russell’s Dow Theory Letters:
1 — Be a skinflint. Cut down on your spending. And be very nice to your boss, assuming you still have a job.
2 — Think in terms of NOT losing money. Forget about easy Wall Street profits. There aren’t going to be any easy profits — not without a huge new infusion of borrowed money.
3 — Be sceptical of everything you read. The media is desperate for circulation, and it will slap on the cover of its magazine or newspaper any damn fool statement that it thinks will sell.
4 — Have faith in your gold. As confidence in the whole monetary system slowly fades, the desire for gold will heighten.
5 — Remember, there’s often a large correction prior to the final speculative gold run.
6 — This time there may not be a “final gold rise,” because large interests may just decide never to sell their gold. They’ll keep their gold as a symbol of “eternal wealth” that can’t be destroyed of go bankrupt.
7– Check out carefully the Permanent Portfolio (PRPFX). So far, it has done well and held up well. It’s actually up so far this year, which is extraordinary. YTD return is 7.33%.
8 — Be very cynical about those “fabulous” money-making ads you hear on TV. Money is hard to make these days and risk in just about everything is high.
9 — Cut out expensive discretionary spending. Instead of eating at your favorite local restaurant, eat home and save many bucks. Supermarkets now stock endless “heat up” frozen dinners. Or better still, starting from scratch make your own dinners. Cooking is coming back.
10 — Take the long view. With stock dividends below 2.5%, the odds are that holding stocks “for the long run” is going to be discouraging or a loser.
11 — Money is made in the BUYING. When you buy anything at the right (low) price, the odds are that you’re going to make money through the passage of time.
12 — Wall Street is suffering. When the Street suffers, its natural tendency is to come up with new “ideas.” The ideas are usually risky (i.e., mortgage-backed packages). Be very sceptical of new Wall Street ideas and products.
Source: Dow Theory Letters
Wow.
Was tip #13 “How to pick the best street corner for pencil selling?”
Did you see this rumor/speculation? Merkel may ask Obama for a $1 Trillion dollar Euro bailout?
http://www.businessinsider.com/merkel-will-press-obama-and-the-fed-to-bail-out-the-eurozone-2011-9
I say we do it but for a Trillion I want that little T -shirt shop on the beach at St. Tropez for collateral. SOB’s making a killing….great view too.
Pure speculation. The author probably dusted off his crystal ball.
Oh, HELL NO. And if we do, I DEMAND the GOP insist on offsets in our education, military, the elderly, infrastructure projects, elimination of the minimum wage, and the obliteration of ALL workers’ rights. Because “we’re broke”. Maybe this will turn their attention away from NPR and Planned Parenthood, and the $150M it will save. And when all else fails, blame gay marriage, because you know, that’s a huge money-saver.
They started this conversation — our need to “fund” our spending — and I DEMAND we finish it.
Put our people back to work! NOW.
This was in response to Alan and the link he provided. It’s ALL your fault internet!
(Shakes fist).
Trixie, you are probably too sane to be the Democratic answer to Michelle Bachman.
But would you consider serving as Obama’s Press Secretary?
Or perhaps in a future Mosler/Hickey/Roche/Beowulf/Fullwiler administration? (Draw straws to see who gets to be Fed Chair.)
PS: The women in the current administration already produce more testosterone than all the men combined – with you in there, it would be no contest.
Pfft, Bachmann or Maddow? Please, child’s play. I’m insulted. The only real challenger I have is Face-Ripper Monkey from The Donner Party:
http://www.youtube.com/watch?v=5lJXlaoAc4U
Also, apologies for the snarky political comments. But I am beyond frustrated with our current political representatives and their inability to implement real solutions to real problems, sans ideology. Going forward, I will try to make more constructive comments, but please keep the bar as low for me as we do for our elected officials.
See? I did it again.
(Sobs).
Trixie,
People might disagree with your politics, but if they disagree with your humor they’re just lying.
Best
i didn’t realize rachel maddow was posting here.
Sounds like “12 Tips For Living Through A Depression(By Somebody Who Has)” RR is eminently qualified to talk on this subject – just don’t follow any of his investment advice, after all, he’s 90 and senile. I’m still smarting from his last “Buy Stocks” call at SPX1550 in Oct. 2007. It was on the cover of Barron’s. Talk about your great contrary indicators…
But number 9 on frozen dinners is hilarious, no?
RR cannot be 90 if he was born in the Great Depression. If he were 90, he’d have been born in the roaring 20s. The Wall St. crash was in 1929, so the man must be 82 or younger.
Frozen Dinners might come back to bite you in the ass in healthcare costs
..or rolaids.
I started reading RR’s letter in the 1980′s. He has never really changed his tune since then, if not before. At least he’s consistent.
Three bullets on gold 4, 5, 6? Doesn’t MMT suggest having faith in gold remain inconsistent with the faith in taxed fiat? Sounds like Russel hasn’t read MMT and accepted that the theory suggest any “rational economic agent” gold holdings is simply risky speculation compared to holding and questioning the riskless fiat and treasury based monetary system.
I really like #3 and apply it equally to what I read on zerohedge as to what I read on pragcap
“Doesn't MMT suggest having faith in gold remain inconsistent with the faith in taxed fiat”
No. Have a good one.
Seriously – please read this from Mr Wray. http://neweconomicperspectives.blogspot.com/2011/08/responses-to-blog-13-modern-money-view.html
Chris what is the deal, if you and Cullen want me to no longer comment it would be simpler to say so. Again when I see reality doesn’t match the monetary system I will question it.
And comes off pretty weak response if the comment coming back is to go read more MMT, or calling me a fearmonger, saying I misrepresent MMT, saying I ask loaded questions, or reading everything I say as yields rising or hyperinflation arguement, claiming I have some personal agenda….do I need to go on. At this point I’ve lost patience from the constant abuse I get from you and Cullen when I comment about a disconnect between MMT and reality. Maybe I need to go read more MMT.
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