Monday, May 16, 2011

Information Overload - Part I

Information is everywhere, understanding it is a powerful thing, and in my opinion, this is one of the most important times in history to understand the economic, financial, and geopolitical events that are taking place. The events will affect nearly everyone on the planet, and in many cases, dramatically.

The second greatest investment one can make begins and ends in the mind, which will serve you for the rest of your life, compounding over time. Here I'll present a few information sources that will hopefully provide a starting point toward understanding today's economic and financial situation. There are numerous other sources that I'll present in the future, but this should serve as a primer.

I've arranged an assortment of books, articles, websites, and videos...they all contain good information, take your time reviewing them, it's worth it.

Mike Maloney - Advisor, Author, Industry Expert
WealthCycles.com - The concept of wealth cycles revolves around the idea that investment classes perform in  a cyclical manner. I'd have to agree with this assessment, and one can look throughout history and identify investment vehicles that have outperformed during certain periods of time, while others have lagged. It is Mike Maloney's contention that there is a reason for this, and that it can be predicted. Based on my own investigations, I would agree with this. These cycles occur for distinct reasons and can be anticipated and profited from assuming the investor has a sound understanding of the underlying mechanics. Overall, There is a lot of good information at WealthCycles.com and it's worth browsing.
GoldSilver Knowledge Center - The GoldSilver website provides a range of information geared toward, you guessed it, gold and silver. Again, browse around and read some articles. If there is something you don't understand Google it and dig a little deeper.

Why Gold and Silver? (DVD)
Why Gold and Silver? An Afternoon with Mike Maloney, subtitled versionMike Maloney's DVD/Video contains a wealth of information concerning Gold and Silver and how he and others believe they're an investment of a lifetime given the currency situation. One should note that gold and silver by themselves are not the end result, instead they are a means to preserve and grow your wealth while the currency cycle runs its course. Once a new currency is introduced holders of gold and silver should look to acquire real estate associated with cashflow or production. Personally, I would rather reinvest in production associated with agriculture, energy, and mining, rather than cash-flow (rental) real estate as Mike Maloney seems to promote. I would encourage everyone to watch this video (I've watched it several times). It can be streamed from Amazon for a few dollars and I've attached an Amazon streaming video link in the image to the left. Take a look.


Peter D. Schiff - CEO Euro Pacific Capital Inc.
Peter Schiff's YouTube Channel - Schiff's YouTube channel provides commentary rooted in sound economics. If you follow the headline news and it doesn't make sense, odds are there is a reasonable explanation and Peter Schiff is on top of it. Recently his video updates have been more sporadic due to his involvement in Schiff Radio, but he does post from time to time. Schiff's most recent video with good commentary can be found here.
Schiff Radio - I have to admit, that I am not a regular listener of Schiff Radio, but I have no doubt that his discussions are rooted in sound economics. If you feel inclined, I would recommend listening to his podcasts. You'll find that real economics can actually make a world of sense...

How an Economy Grows and Why it Crashes

How an Economy Grows and Why It CrashesThis is actually a 'picture' book that illustrates the basics of real economy in an easy to grasp manner. The simplicity is striking, but one can immediately begin to see how a sound and working economy really functions through production, innovation and real capital savings. In my opinion, this book should be a requirement for students as an introduction to economics. You can click the image to the left and it will take you to Amazon where you can buy a copy for less than $12.00. It's worth the read and everyone on this planet should and can understand the basic concepts presented in the book.

Crash Proof 2.0: How to Profit from the Economic Collapse
Crash Proof 2.0: How to Profit From the Economic CollapseThis book by Peter Schiff is actually an updated version of the original that was written before the housing implosion. In the original he details how to profit from the collapse as well as how to position your investments for the next global financial crisis. Think of the housing collapse as the dress rehearsal for the real show, which I expect to occur before 2015. Overall, this book is a good read because Schiff discusses what has essentially happened and compliments it with a post-housing meltdown analysis and what the future holds.  Again, you can  click the image and it will send you to Amazon where you can pick up a copy for less than $20.

Ludwig von Mises, Friedrich A. Hayek, Murray N. Rothbard et. al. - Dead Geniuses
Mises.org - The Mises website is educational by nature and serves to promote the ideals of Austrian Economics. In the US, Keynesian Economics is the generally accepted school of thought both in academics and at the government level. It's something of a top down approach where the government and central banks meddle in the markets in an attempt to 'smooth out' the business cycle. Conversely, Austrian Economics is more of a bottom up approach emphasizing real production, sound money, and free markets. A couple of humorous videos debating the school of thought can be found here (Part I) and  here (Part II).  As for articles from the Mises website, these are my favorites:
and these are further readings in the collection:
I originally bought a book that contained all of the essays; however, the entire collection can now be downloaded in PDF form here. Some of the essays can be quite dry, but the top three listed above are quite profound in explaining the business cycle and its relation to interest rates and capital investment. In my investment strategies I use the Keynesian and Austrian theories to predict what the government will do (Keynesian perspective) while understanding how economics really works (Austrian perspective).

A note on game theory: In essence, you can predict how the Fed and politicians will set policy by understanding the Keynesian perspective and set investment strategies based on their flawed maneuvers and your sound understanding. The general idea goes something like this: "understanding how your opponent will play their hand, even if they continue to play it incorrectly, will allow you to capture their perspective. With their perspective solved, you can tailor your hand to continuously outplay them." Food for thought.

Finally, the essence of of what I'm trying to say goes something like this: understanding real economics is critical to identifying investment opportunities before they arrive.

National Inflation Association (NIA) - Documentaries and Commentary
The guys over at inflation.us believe that that United States is headed for a hyper-inflationary depression and provide free information to prepare the public for such an event. With that said, the website also promotes a number of penny stocks that it sends out in its newsletter from time to time. It has also employed at least one individual who turned out to be shady in my opinion. Finally, the president of the website has a history of pump and dump (as a teenager). The story goes something like this: As a teenager Jonathen Lebed would go into chat rooms and talk up penny stocks that he owned and when a bunch of people bought, the price would rise, and he would sell for a nice profit. As a teen, he made hundreds of thousands doing this. Overall, he's brilliant with money and somewhere between a stone-cold and white-collar hustler, which part of me respects. With all that said, the website seems to have an agenda that I'm not sure is completely above board, but the information they provide is good nonetheless just don't buy their penny stocks without doing your own homework.

The real value that I garner from inflation.us is the well put together documentaries that expose reality in an otherwise fanciful world. Two of their more recent and more popular videos are embedded below. If you have the time, take an hour and watch them, they're pretty easy to take in and provide good perspectives.



If you learn a few things from this post then I've done my job, but remember not to take anything at face value. Instead, take in information, think about it, and come to your own conclusions.

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