The Caulfield Guineas

The Caulfield (Melbourne, Australia) Guineas was held today and the brilliant 3-year old horse Press Statement won it in a dominating performance leading for most of the way. 

This race is regarded as a 'stallion-making' race, and an 'entire' that wins this race instantly becomes worth many many millions as a potential sire at stud.

'Press Statement' - the brilliant 3-year old colt

I have been biting my tongue about this horse as it made its way through the ranks to this race today and I didn't want to say the wrong thing before it had proven itself. I thought it would win. And I was very happy when it did - and in such convincing style.

This horse will very probably be raced for at least another year and it has trounced the best horses around in its age group at set weights (all carrying the same weight) over a mile.

Following this kind of horse is a reflection of what one ought to do in business and in life: become involved with the best. Well, everyone already knows this. The doubt enters into the thinking when we all witness such things as the US Federal Reserve System, and we can see the moral turpitude of the present era money system and who gets the preferential advantages and what the effects on equity valuations and investment thinking, are. 

Fundamentally, what the market commentators generally misunderstand or perhaps actually don't know about, is the reason for QE to run into several years. The reason is this: as the interest rates are made to fall, it - The Fed - hands cash to a special group of banks that are essentially liquifying their previously valueless capital, which they handed to The Fed as security for Treasury Bills when the Paulson/Geithner bailout took place at the start of the QE arrangement. QE is paid for by the taxpayer, but over the several years of its operation rather than in one hit, in order to not place a completely obviously odious pressure on taxpayers and the nation. It is made to seem not too obvious, but it is in reality completely odious all the same. Because terminal consequences don't appear in the immediate time frame, and so The Fed and the privileged banks get away with it in the short and medium term.

People think that a high US dollar currency exchange rate, and superficially low interest rates, and especially, a rising Stock Market, all mean that there is no problem and that The Fed's solution to a major banking crisis was a correct idea, was successfully implemented, and is working.

Most people will never give up on a bad system that they are used to, and they usually remain nostalgic about it, and faithful to it, even while it becomes quite functionally dead in reality, firstly because they do not easily see competing and better options, and secondly because of conservative bias in the bulk of people's minds. 

But it is functionally dead already. The appearance of function is a deception. 

The Rolls Royce 'elite' customer event
held in Sardinia a few days ago.

We will talk about what is functionally alive in the next posting, and about what 'functional' means in the first place, too.

For now, here is a pic of the Porto Cervo, Sardinia (built by that great racehorse owner, the Agha Khan) Rolls Royce summer style party. This is not a posed, publicity shot, but an actual pic of real people attending the launch of the new Rolls Royce car model - the 'Dawn.'

All these very wealthy people put their money into buying a Rolls Royce because Rolls Royce make the best cars in the world. Do they put their money into the American Stock Market because the best companies are there, with the best products and services, and the best managements generating the best profits? It is very doubtful that they do.