I am trained in property theory, not the workings of Wall Street, but my father was an honest broker and investment counselor and I picked up things from him that stuck and saved me much grief in directing my TIAA/CREF (college teachers’) pension allocations.  TIAA is one of the best and the largest fund in the business and one should join it if one can.  Two of my daughters were able to due to brief related jobs (at NASA and Barnard College).  Their contributions have grown considerably in a few years.  One can shift one’s holdings at no cost in fees or taxes until one retires.  Here are some of the lessons that I learned:

1) The future may well NOT resemble the past — or at least there are a number of different pasts from which to choose.  My father used to research stocks and pick 10 or a a dozen which looked solid in which to invest a portfolio.  I recall him giving me a share of Hawaiian Pineapple which had been doing well — just before a massive strike of workers out there knocked it head over heels.  Taught me a lesson.  One may need to break with the crowd to survive.  Never buy at the top or sell at the bottom.  The 2000 bust caught too many people in NASDAQ when they would have been better off in bonds which went up while stocks were going diving. One should have gotten out of bonds a bit back. One can only sense a general drift — the market is diving right now which one hopes will not produce a serious recession, but which might.

2) The insiders have a huge advantage over those who do not have information which flows fairly freely, despite laws against it — alas, Martha Stewart’s time in jail.  There is no way for outsiders to get info on specific things.  One can only sense a general drift at best.

3) Greed is the common cause of downfalls — both of the greedy ones and the rest of us.  The Hedge funds — unregulated, based on credit, promising large returns over ordinary market levels, and with reduced taxes — should never have been allowed to run wild.  They are now tumbling in yet to be determined numbers as their holdings are found to be worthless and this buy propecia generic downfall is being spread to many an innocent person’s pension funds, probably unwise college trustee investments, as well as those out to make a greedy buck.  The first rule of the stock market game is don’t be greedy. When one is young, one can risk stock gains and losses, but as one nears retirement one had better find safe things in which to vest one’s savings.

Bottom Line: for the average person the stock market is something like playing the games in a casino.  Those running things will not lose, but players are constantly at risk.  Our government has introduced some protections in the past, e.g. that one will keep $100,000 of a bank account if a particular bank goes under.  But apart from fixed income things one is playing a game when one ventures into the markets.  The rules are various — written either by those who run the games or by governments — depending upon which political parties representing which interests are in power.  The Republicans have a history of being greedy and that greed has brought us much grief in the past.  The Democrats have at times introduced protective legislation such as we greatly need now.  We shall see what the market and elections bring us in the next several years.

Let us hope for the best, but nothing is certain in the cruel world, as they say, except death and taxes.  And then there are those right wingers who want to introduce what they have misnamed the FAIR tax — the sole tax would be a 23% sales tax on everything.  Needless to say this would leave not much left for people — and particularly those who spend the bulk of their incomes on things they need to live such as food, (water these days), shelter, and medical care.  Progressive taxation which takes larger sums from the wealthy must be restored if we are not to become a nation of economic slaves owned by a few thousand multi billionaires!

P.S. the market futures are not looking good this morning after yesterday’s crash!

“A war is just if there is no alternative, and the resort to arms is legitimate if they represent your last hope.” (Livy cited by Machiavelli)

Ed Kent  212-665-8535 (voice mail only) [blind copies]

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