Good News For The Grandchildren?
“Good News for the Grandchildren” was the title of David Einhorn’s talk on Wednesday in the Ira Sohn Seminar at New York. I had attended the meeting. “Do you feel you’re worried that we’re passing our debt on upcoming generations?” Einhorn began… “Anyhow you need not worry. Our generation - not our grandchildren’s - have to deal with the consequences.” Einhorn’s investment success have made his hedge-fund people rich. He’s profited them over 20% for every year compounded, after fees. Einhorn famously revealed that Allied Capital was defrauding the government. He wrote a fantastic book regarding his 6-year battle with Allied, called Fooling Some of the People All of the Time. Every value investors must look at it. (He first publicly stated Allied was defrauding the government in the 2002 Ira Sohn Seminar.) Einhorn also “very nearly made it to the final table” in the World Series of Poker main occasion in 2006. He donated his $659,730 in winnings from that event for the Michael J. Fox foundation for Parkinson’s Research. And then in the spring of 2008, Einhorn in public predicted the fall of the Lehman Brothers. Hence he’s wise, a winning trader, and a great gentleman. He’s worth listening to. Einhorn thinks that the America can experience a Greece-type debt situation much prior to somebody thinks (in our generation, not our grandkids). He described civil servant salary as an case for the U.S. crisis in making just like Greece… Einhorn explained how in 2008, the common United States federal civilian salary with reimbursement was $119,982, when compared with $59,909 for the non-government employee. Moreover in case you have government work, you can still remain employed for twenty years after that you can retire, receiving retirement remuneration the remainder of your living (the following 40 years). Einhorn asked the sustainability of these entitlements. Einhorn wasn’t really the only speaker at the conference… His hedge-fund-manager peers shared their favorite thoughts also. The majority speakers in the conference held the same view to David’s. The optimistic take was essentially, “People are adaptive… We’ll determine ways to adapt to these time, after that be profitable out of them. There is never been a catastrophe that you can’t see coming. If you are able to see it coming, then you definately can adapt.” To invest in this difficult time, David thought to own gold as well as gold stocks… and worry regarding your grandkids afterward. Like he thought, “As soon as push comes to shove, there is a good chance the Fed will print currency to the point where big inflation shows up. Gold Market Monitor is a specialized newsletter for timing the Gold Market that shows its members the best time to invest in gold bullion and when to exit to the safety of cash.Start your 60-day trial to the Gold Market Monitor which uses an exclusive gold timing strategy to help its members safely profit from underlying trends in the gold market. |