Thursday, 18 December 2008

I welcome the approaching storm

"I would never take any risks at this time," recommended Nadia Mainz, my banker. I looked at her, half-sceptical, half-puzzled. "Share prices are going through 10 % daily fluctuations," she added. "Markets are very unstable."

That was the understatement of the century, considering that Nadia works for a bank that has lost USD 543 million in the last quarter. I kept silent while she read out to me some dire predictions from her bank's investment research department.

"All that is irrelevant," I commented softly. Nadia Mainz stopped reading and looked at me. I saw in her eyes that my previous account manager at the bank must had warned her that I was quite a character. A staunch individualist. Someone who does not listen to good advice from his banker.

"This is the consensus opinion," she retorted self-assured. She laid the bank's investment report on her desk and stared at me defiantly. Since I know better than wasting my time arguing about the future, I picked up my chequebook, stood up, and nodded goodbye to her.

"So you don't think that a storm is coming?" Nadia insisted in a provoking tone.
I could see that she was a fighter. She stood up herself and pointed at another folder on her desk. "All major investment reports are predicting enormous volatility in the financial markets during the next months," she reasoned.

"I love storms," I answered as I picked up my coat from the hanger next to the door. "
When a storm approaches, all house prices go down dramatically." Unconvinced by my arguments, Nadia shrugged her shoulders. "So what?"

"All you have to do is to walk around and listen to people who want to sell their house," I continued. "When someone offers you a cheap wooden building, you pass. On the other hand, when someone offers you a cheap stone house, you buy it. Then you wait until the storm is over and re-sell the stone house for twice the price. That's all there is to it."

[Text: http://johnvespasian.blogspot.com]

[Image by SergioDJT under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]

I welcome the approaching storm

"I would never take any risks at this time," recommended Nadia Mainz, my banker. I looked at her, half-sceptical, half-puzzled. "Share prices are going through 10 % daily fluctuations," she added. "Markets are very unstable."

That was the understatement of the century, considering that Nadia works for a bank that has lost USD 543 million in the last quarter. I kept silent while she read out to me some dire predictions from her bank's investment research department.

"All that is irrelevant," I commented softly. Nadia Mainz stopped reading and looked at me. I saw in her eyes that my previous account manager at the bank must had warned her that I was quite a character. A staunch individualist. Someone who does not listen to good advice from his banker.

"This is the consensus opinion," she retorted self-assured. She laid the bank's investment report on her desk and stared at me defiantly. Since I know better than wasting my time arguing about the future, I picked up my chequebook, stood up, and nodded goodbye to her.

"So you don't think that a storm is coming?" Nadia insisted in a provoking tone.
I could see that she was a fighter. She stood up herself and pointed at another folder on her desk. "All major investment reports are predicting enormous volatility in the financial markets during the next months," she reasoned.

"I love storms," I answered as I picked up my coat from the hanger next to the door. "
When a storm approaches, all house prices go down dramatically." Unconvinced by my arguments, Nadia shrugged her shoulders. "So what?"

"All you have to do is to walk around and listen to people who want to sell their house," I continued. "When someone offers you a cheap wooden building, you pass. On the other hand, when someone offers you a cheap stone house, you buy it. Then you wait until the storm is over and re-sell the stone house for twice the price. That's all there is to it."

[Text: http://johnvespasian.blogspot.com]

[Image by SergioDJT under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]