The word for the month of July, in
French, is 'Thermidor.'
And, it is from this word that the dish
'Lobster Thermidor' gets its name.
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| Lobster Thermidor |
Well, in fact, it is a specific July
that the name is derived from – the one in 1794, during which
Robespierre was overthrown.
Maximilien
Robespierre was a truly abominable person, who made much of his
integrity and honesty, and yet who could not resist manipulating and
exploiting the clamor of the crowd, for his own power-hungry ends.
His time at the top of power in France was known as the Reign of
Terror, a period during which almost anyone might have been
executed on the strength of a trifle because of the self-serving
zealotry of Robespierre in particular.
And it
is with this little item of history in mind, that I wish to address
the matter of taking financial risk today. Risk is of course, as you
no doubt know, not
about the potential of loss, but about the degree of volatility, over
the expected course of any investment. When the word 'risk' is used
by the less learned, and is meant by them to apply to things like
race horse gambling and so on, they are actually talking about the
relative 'odds' for any outcome occurring, and not about professional
investment risk as such. These people are generally looking at some
very very quick event, in which money might be made on an immediate
expected outcome. Professional investors want to have some ultimate
result averaged out over a long period, say, ten years, for example.
We might well
inquire into the consequence for our definition of risk (which is the
standard economics textbook one, by the way), of a Central Bank and
their political accomplices manufacturing a 'zero risk' climate for
interest costs and share prices.
Revenues and
profits by companies ought to have the most significant bearing on
share prices, but, if they don't because of Central Banking policy to
support equity price levels regardless of all other factors besides
the government and bank determination to ensure liquidity (by which,
they really mean, 'to preserve the remuneration levels of executives
at unprecedented and unjustifiable heights') – then we are being
faced with a similar form of hypocrisy that Miximilien Robespierre
indulged in.
Will there ever be
a 'Thermidor Reaction' – which is what the overthrowing of
Robespierre was called at the time – against contemporary Central
Banks and hypocritical and self-servingly hypocritical,
zealot-driven, governments?
On the surface,
since there is no volatility, it seems that there is no risk entailed
in investing in stockmarkets. But there are also no standard ways of
understanding profit opportunity either, because of the artificiality
of the price of money... And many people also complain about the
hidebound nature of the rules and bureaucratic red tape involved in
launching productive capital of any kind.
Thus, one thing is
clearly rising – public dissatisfaction. And this, like the recipe
for Lobster Thermidor, is also a recipe full of mustard powder, if
only metaphorically.
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| Holy Grail? (...why am I always posting Maserati pics?!) |
If there are any of
you still out there who cherish the idea of being an individual –
and individualistic - money-making private investor, then you must look at non-standard ways of perceiving profit
opportunity. You must abandon the standard route, go into the deep
silence similar to that of a Benedictine cloister, and hope that you
will gain a vision of the investor's equivalent of the Holy Grail!
There are many knights on this Quest for the 'holy grail;' but like
the myth, only one or two out of many will ever see it I fear. This I
certainly know – no major name in investing is even close to seeing
it. No. Not even one of them. Not Buffett, not Gross, not any of
them. These times have found ALL of them wanting.
In the next post, I shall outline some non-standard profit opportunities.
Best
Calvin J. Bear
