Invest When It Feels Like the End of the World
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I just finished reading a fascinating book that I thought had one very powerful message, given the market that we are in today. The concept of the book is the author’s journey around the world via a tricked-out Mercedes Benz as he experiences life and considers investments in some of the most remote and off-the-beaten path countries and their markets. It was his approach to deciding when to invest that I found most interesting!
Invest when it feels like it is the end of the world, when pessimism is at its highest and when it looks like things cannot get any cheaper. Of course, Jim Rogers had to see that other things were in place like a strong government and a lack of corruption and greed. However, overall his decision to invest in the stock market of a developing country was driven by just how bad things were at the time and things looked like they were slowly improving.
At many points, the book Adventure Capitalist, and the author’s investments in various markets reminds me of the markets that we are in today. Things seem to be at their very worst right now. The financial markets are all but collapsing, the largest companies are insolvent, and it feels like absolutely nothing can help. Perhaps this is a sign that we should consider to invest and buy.
To be honest, I do not know the answer to whether this is right or wrong now. However, my approach is to continue investing through these tough times and not do anything more, or anything less. Simply to continue on with my chosen investment path. Jim Rogers approach was more of an investment timing scenario, but he did take the long term view and his risk adverse nature was what made him really rich. Being risk adverse in this market is the key to success.
10 Comments on this post
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Dividend Growth Investor said:
Nice review Dividend Guy. I guess the old adage “when they are crying, you should be buying. When they are yelling you should be selling” might be the best peice of investment advice ever given..
September 17th, 2008 at 8:02 am -
Nurseb911 said:
Great timing for this review DG! It doesn’t feel like the end of the world to me, but the market seems to be thinking along those lines.
September 17th, 2008 at 1:28 pm -
augustabound said:
Nice timing.
I actually got this book for $2.50 at the “Worlds biggest bookstore” in Toronto. It was on the bargain table………Jim Rogers on the bargain table!
I have yet to read it though. I might just have to start reading it tonight.
Thanks Div guy, I actually forgot I had it. lolSeptember 17th, 2008 at 6:13 pm -
Dividends4Life said:
It will be another week before my brokerage account is funded. Based on the recent pullback, some of the stocks that have been too expensive are in my buy zone. I hope we can stay down until I am funded.
Best Wishes,
D4LSeptember 17th, 2008 at 6:39 pm -
The Dividend Guy said:
Hey D4L - what is on the buy list for you?
September 18th, 2008 at 2:14 pm -
Dividend Growth Investor said:
I am in the same boat for the same reasons as D4L - but I won’t be funded until October. By that time stocks would be hitting multi-year highs
September 19th, 2008 at 8:56 pm -
Dave From GP said:
Ha! I got this book for $2.00 at Coles! I wouldn’t pay a penny more. I could not finish it. The guy’s ego put me off by the time they reached China.
October 3rd, 2008 at 9:10 am
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