Newsletter – July / August 2012 – If you can’t stand the heat…

If you can’t stand the heat…

My hobby is the study of ancient wisdom and philosophy. In June that hobby took me to the high desert of Arizona to participate in an ancient aboriginal ritual called Sundance. It was hot: hotter than I’d ever experienced before. Parts of the USA had been caught in a heat wave and the electrical grid had failed. It was very hot, and the infrastructure had broken down.

My personal infrastructure was breaking down too. I found myself battling heat, dehydration, sunstroke, sunburn and dust inhalation. They warned us about rattlesnakes and scorpions. What on earth was I doing there? Surely there’s a less risky way to study ancient wisdom!

Why couldn’t I have stayed home and read a book? Why couldn’t I watch some television program on the History Channel? But no, I had to do it myself. And there I was, in the middle of the high desert of Arizona on the solstice. It was like Hot Yoga with no escape. The heat was on.

Many investors find themselves in a similar situation. They want to learn about investing by doing it themselves. But, with the European Union in serious trouble, with problems in the real estate markets, and with unending international economic weakness, it’s getting too hot in the investment world. Why can’t we learn about investing in a time like the 1990s? In those days it was easy: you simply bought a high quality mutual fund and watched your profits roll in. We could buy a book on how to invest like Warren Buffett, or watch Lou Rukeyser on television and learn all about investing. But, we can’t do that today. Today, the heat is on.