Morning Folks!
Business in my mind starts with an assumption. An assumption comes with variables. The variables are the moving parts of the equation that can change things drastically. But you start out with certain numbers that are assumptions. Then what you can do is go back in time and fill in the blanks or update them as needed. How well do you know your Algebra? How long into the future do you look?? Minutes? Hours? Days? Weeks? Months? Years? Decades? For a lot of us we have visions in all those time periods. Visions, predictions, planning and expectations based on assumptions. Below is a post for 2007 looking forward. The single most important variable in that post and equation was the low unemployment rate. Through the eyes of 2007 I can go back into 2007 and adjust the variable and then a new assumption is updated, adjusted and born. But the birth of this side of the assumption becomes much stronger as actual data is substituted for those assumptions.
Last year I made some pretty outlandish comments. I wasn't even going to post it because I know the fallout. But hey, it's what I do. Things like your favorite restaurant will close down. Thinks like malls will start to close down. Only a crazy person would have taken me seriously. But that was what I saw. That is what I still see. Only thing different is now we are close enough to see the reality of it and the fallout and the comment is now believable when just a few months back it was not. It was seen as an 'Exaggeration' and worse or so many thought at the time. Do you still think that sounds so crazy or is that something that now looks like it could happen? Is about to happen? Is happening?
That conclusion was not being a visionary, it was taking a set of assumptions and seeing where it would lead to. But HUMAN NATURE prevents most from looking that far down the road and seeing things that seem ridiculous at the time. If I were to predict life as it actually unfolded and did it 5 years ago and got it 100% right, I still would have been put in a rubber room. Seeing things that far ahead only get you in trouble because human nature weighs in and folks can't handle things they don't see. That they don't understand. Human nature has an ugly side and human nature is fueled by other human nature. History proves this over and over again. History is where you look to get answers for the future. It's all there. It may be disguised, but it is all there. Once you learn how to read the history in disguise, add a little reality and you can see things pretty clearly. You can plan instead of being surprised. You can avoid by seeing the pitfall. You can triumph because you see great weakness that can turn into great strength.
Here is my update. We are SOOO SCREWED!. Oh yes, screwed and tattooed and the greatest transfer of wealth is occurring below our collective noses as I write this. The greatest robbery in the history of mankind. The greatest shift in reality the world has ever known or seen. That is before we even talk about the political instability that will get worse as the economics get worse. The problem is 'Where do you put the wealth?' The dollar is going to collapse and then melt and we are going to have inflation the likes of which we have never seen. Before you jump up and down and cheer the downfall of the dollar, let me predict it will wipe out the Euro and every other monetary instrument in the wake of what is to come. My $2 million dollar turtle for your 4 million euro lizard.
The entire world economy is akin to a ticking time bomb. Each day we get closer to the collapse, meltdown and fallout that is to come. Don't believe the experts, they have gotten nothing right yet. They are always 'Surprised' or 'Late to the scene' or they did not 'Expect'. They work from a best case scenario POV. Can't do that in business. You have to work on a 'Worst case scenario' and work inwards. I think experts are largely just guys that are unemployed or fired from their last job.
So what do you do with that info? Honestly, I have no idea and I hope what I see is wrong. What I do know or what I fear is that it will break down and get out of control. Gold works for the short term but it is really not a solution. How much are you willing to put in gold? If you have $1 million cash, how would you diversify? Whatever you do you MUST BE PREPARED to lose 80% of your value. Stop screaming!! Yes, I said 80%. Between runaway inflation which is coming to the world very soon, or crashing stocks, or a meltdown of the dollar or too many variables to list. So 20% gold, 20% currency, 20% stocks, 20% property, 20% misc and a meltdown could wipe out 4 out of 5 sectors just on the initial strike. A shell game like none other in the history of the world.
Now that is just a scenario if everything goes smooth. It does not include a host of other variables and have not even factored in an assumption. First we have the Swine flu which is now predicted to infect 1/3 of the world's population. Not too good for travel. Collapse. Then if you were listening to the news, North Korea just tested another nuke. Something could go terribly wrong there. Israel and Iran have a showdown coming in a future close and near to you. An attack worse than 9/11. What would that do for confidence? A corruption meltdown that sweeps governments around the world. Hell, I have barely scratched the surface. I could list so many more it will make your eyes spin. Never in HISTORY have we had so much turmoil and a world in danger of screwing itself.
Point is I have no idea at this point where this roller coaster is headed. It is a ride that is out of control. When the population of the world figures out that nobody whatsoever has any control of any sort, the reality and gravity of what we are about to go through will become apparent. Doom and gloom? Hell no. Reality at its best. Deal with reality. Hoping and wishing and crossing fingers won't save anyone this time. We are all going to be tested in ways we have yet to even think of. We have all been bullshitted in ways history will write about. A train wreck is on the way. Where on the train is the safest place? I still don't know but with Chase Bank now paying .01% interest rate, the dividends domains pays is worth a great deal. So we are lucky in that respect. But we are very vulnerable in every other aspect. The fallout of all this is just beginning. A tornado in slow motion is about to hit. Each day of each week of each month will be much worse. What you can do is stay tuned to life. Keep your nose close to the ground. Find opportunity. Look for safety. Have a plan 'B' and plan 'C' and don't be surprised for both plans to not work out.
The crime rate is rising. Desperation will set in. Robbery could get to an alarming rate. Courage is only found in commoners. Those responsible for our future have little courage, no backbone and their word is cast in wet cement and soon to disappear.
The high end housing market is about to meltdown. The high end homes on the ocean that were going for $12 Million are now going for $6 million and THERE ARE NO BUYERS even at that level. So what you are likely to see is even the wealthy walking away from mortgages. Why pay on a $10 million dollar mortgage when the house is worth only $5 Million and the costs in taxes and insurance is weighing you down? So when these folks walk away this will present an entire host of other unforeseen problems and local tax base in free fall.
So why this post now? Well when I read the post below the key variable in my assumption was we were at 5% unemployment. Now we will soon be closing in and then eclipsing 10% nationally with pockets of 25%. That's a big deal in the equation and that equation will get worse. What we are going through is akin to the world spinning off its axis. The wobble is off center. The wobble could easily become out of control. Those that think about this stuff and prepare for it will not get hurt as bad as those that laugh in the face of something certain to affect them. Time will prove these words true or not. But I certainly would trade the embarrassment of getting it wrong for waking up and have this crisis over and gone and get back to the future!
Have a GREAT Day!
Rick Schwartz
Here is the Direct Link to the actual post below which was written on December 20th 2007 long before the bailouts and the banking collapse. When a key variable changes (Unemployment) so does the equation.
Good Morning folks!!
2007 has been a great
year. The challenges came from every direction and we emerge stronger than ever and ready
to tackle 2008. It's still a couple weeks away but 2008 is already in full
swing. In the first few weeks of the year we will hear how the experts are surprised
about how strong online spending was. The experts are really no experts at all
or they would have predicted what is coming not reacting to it.
The same may be true of
the Presidential primaries that in the next few weeks may change the entire
picture as the nominees from each party emerge. In all my life I have never
seen a more interesting race and be prepared for some surprises. I have no idea how it will shake out. What are your thoughts?
2008 won't be without
its' challenges. The economy is in a bit of turmoil but unlike past economic
woes this time employment is very strong so the dynamics may be quite a bit
different. We are at a teeter totter point and I am not sure if we will
teeter or totter. We just might squeak through but not without some real pain
scattered through the economy. Then again it could get very ugly as we really
are in uncharted territory. The saving grace may be the Internet. But if the
folks begin to run scared and pull back, it will lead to a self fulfilling
prophecy and they will be responsible for their own undoing. In slowdowns you
don't pull back. You gun the engine and hope you can minimize the impact as
opposed to pulling back and let the tide be your destiny. You fight to stay
even or you lose very big.
Personally I am looking
forward to the coming shakeout. There will be all types of opportunities and
bargains spread throughout the business spectrum. Many things may manifest
themselves in an unpredictable manner. As Steve Forbes told us directly in
October, be prepared for a 'Roller coaster' of a ride. The key is having CASH to swoop down and score big.
Like many of you I am
going to unwind and enjoy the next few weeks. I will return in mid January
ready to go for 2008. Until then I invite you to go back and read my 52 posts
that I made in 2007. Most will pay you dividends the minute you read some of my
points and think about it. Even if you disagree, I force you to engage. I force
you to reconfirm. I force you to take a second look at something that you may
think complex and actually find out it is quite simple.
To get you started here
is a list compiled by someone as 5 of the top 100 domain blog posts this year.
I encourage you to read all my posts like they were chapters in a book. With
the exception of a handful they are all related and entwined.
The Line in the Sand
http://www.ricksblog.com/2007/04/the_line_in_the.html
Truth to power
http://www.ricksblog.com/2007/04/truth_to_power.html
The 'C' word
exposed:
http://www.ricksblog.com/2007/07/the-c-word-expo.html
How Madison Avenue let
corporate America down
http://www.ricksblog.com/2007/04/how_madison_ave.html
Domain 'type
ins' represent more eyeballs than American Idol
http://www.ricksblog.com/2007/04/domain_type_ins.html
Happy holidays, Merry Christmas, Happy
New Years, GOOD HEALTH to all and see you when there is something to say.
Have a GREAT day!!
Rick Schwartz
Anunt
If everything is about to fall of the cliff…i guess it’s time to short stocks and make money going down…while everyone else falls off the cliff!
Mike Cohen
Some heavy shit… Long post.
I am still seeing tremendous opportunities and ready for whatever comes.
Diversification is indeed the key.
Cheers!
Mike
Harry
Only the ones that exaggerate can explain it well ;)
PS:
Here is another equation replacing one variable:
99942 Apophis, we have the chance the dinosaurs never had !
Graham
Rick, don’t panic!
90% of people are employed the economy is running along nicely. Why would centuries old economies suddenly collapse? What has actually happened that makes today or the near future so different than 10 years ago? 20 years ago? WHY can’t the world keep on thriving as it has? Everything is perfectly stable, the system just fine tunes itself.
eddg
Rick Really??
You sound like Dick Cheney of domainers.
Is the economy strong? NO but Snake Plissken has not taken over yet so I still have hope. OR has he??
andrew
@ Rick, you seem to be reading all of the conspiracy theory web sites.
@ Anunt, stocks should rise with the inflation. Go for globally diverse companies.
Andy
As Mark Twain said, history does not repeat itself, but it often rhymes.
GhettoCaveMan
You are correct once again. If anything you understate the battle that everyone is engaged in whether or not they know it.
It sounds like we subscribe to some of the same financial commentators.
To the”Unwashed” these predictions may seam outlandish, however, once one realizes that CNBC & others are simply shills to pull”dumb money” into the game – it changes your perspective completely.
People forget the #1 purpose of financial markets is”to transfer wealth.” Some might say to”transfer wealth from the many to the few”. They were not designed to fund your retirement – although its been perverted and sold as such for the last 60 years.
I post the following links only to help people make sense of dire & perilous situation that the US & the globe finds itself.
These invaluable resources have enabled me to:
– cash out 401k in 8/07
-divest of all real estate by 12/07 when any buyer could still get a home loan.
– take a 0% cash advance from my BOA credit card & short BOA stock all the way down beginning in 7/08.
I wouldn’t have had the confidence & balls to do it if I were still wearing those rose colored glasses circa 1950.
Mr. Schwartz permitting, the links are:
http://www.AlMartinRaw.com
http://www.TheInternationalForecaster.com
Regards,
GhettoCaveMan
fpdomains
Dude..you are 100% right on. I have been trying to explain this to my friends and they get pissed at me.
The biggest swindle in world history has taken place and I tried to explain this over and over. The criminals in power have counterfeited 15 trillion dollars, given it to their friends and convinced most folks it was for their own good.
Peter Schiff and the Zeitgeist Movie. rekonize…
Michael Berkens
Rick
I know we have privately discussed many of these issues in the past.
I think that you are describing a situation which may not be economically possible. A situation where every investment vehicle, stocks, bonds, commodities, real estate, every monetary fund, falls in value in every country in the world at the same time.
If there is runaway inflation, the interest rates will raise dramtically on savings allowing people with cash to receive 10% or more rather than the current .01. People has to and will invest there money somewhere. Something will have to go up. Many stocks are way off their low of a couple of months ago. Google is at $410 up from $280. Baidu is at $250 up from $110, Apple is up to $135 from $80. Bank of America is at $11 off of $3.
Euro’s have gone from $1.27 to $1.40.
There has been plenty of money made over the last couple of months and there will always be something going up, and down
Rob Sequin
Jeesh. I thought vacations were to take your mind off this stuff :-)
1. You say to diversify”20% gold, 20% currency, 20% stocks, 20% property, 20% misc” What about domains? Are you not buying domains?
2. You said in an earlier post”This period is your last best chance to find gold at below market prices. The window of opportunity will be quite short. It started just last month and could be over by this fall. Puff. Here today, gone tomorrow. The aftermarket next year won’t be as good as this year for the simple reason that there will be less domains of quality up for sale.”
So, do you still recommend investing in quality domains and do you no longer see the economy getting better.
Lastly, I would suggest that people study double tops to bull markets.
If/when we get a couple thousand points higher on the DOW, look for the price to fail to reach new highs THEN watch the fall from there!
Kevin
I’ve been alive for over 5 decades. In all those 50+ years I’ve gone through every type of economic cycle
possible including this current roller coaster ride. I’ve come to the realization that there is only one single asset that you can bank on 100%, no matter how bad the economy is. This asset never ever ever loses its power nor its value. It is more valuable than gold, diamonds, oil, cash, real estate, and anything else in the world and no one can take it away from you nor diminish it’s worth.
This asset is called Knowledge. Even if tomorrow a meteor struck earth and we went back to a caveman lifestyle, those with Knowlege would quickly become the most valuable people to others and would rise to positions of power, authority and wealth.
So forget about the 20%, 20%, 20%, 20%, 20% investment strategy. That only splits the risk to your assets into little pieces that can still be taken from you or iminished into little or no value. Right now the best investment strategy is to invest in your mind and learn as much as you can about things that you think other people will need or want in the worst case economic scenario. That strategy is an insurance policy that will never fail you and always be there for you just in case everything does fall apart.
The more things you know how to do the more valuable you are to the world. Wealth can be created and achieved by having more knowledge than anyone else, specially in specific areas.
This is why I laugh watching pundits telling people to buy the market now, or buy gold now, or buy real estate now while it’s so cheap. Not that there is anything wrong in doing that, but those are all just sales pitches and nothing more. Invest in your brain and learn, learn, learn!
How much time do you spend currently each day learning new things? This is the question you really
need to explore. For most people the answer is not even in minutes. Turn off watching TV for hours per day and read books hours per day, study information on the Internet, learn new skills, learn how to build something with your own hands, learn how to grow food, learn how to provide medical care, learn how to fix things. The list is a mile long how many things you can learn.
Knowledge is the best investment asset you can own and it will earn you the biggest ROI forever!
Amanda
“When the population of the world figures out that nobody whatsoever has any control of any sort, the reality and gravity of what we are about to go through will become apparent.”
I’m not sure about that. Check this out – http://video.google.com/videoplay?docid=1070329053600562261
Call me nuts but there is alot of evidence to support this…
UFO
Rick,
You should ditch your television, seriously.
If you watch the news and all the other increasingly sensationalist commentary, it will make you worried about everything.
Like about 3 people in the US have died of so called Swine flu yet some 30,000 Americans die every year of normal flu. Bird Flu, Pig Flu… next it will be CAT FLU (hmm.. better buy catflu.com)
When I was a kid I used to seriously play the stockmarket (I was calculating PE ratio’s and Dividend yields when I was 11) and frankly it was the worst time of my life, when the stockmarket was up I was happy, when the market was down I was depressed, what a stupid roller coaster to be on. If money is anyone’s measurement of happiness then they need to get a better perspective on life.
We’ll only be back to the Stone Age if a war happens and incidentally I am more thinking about internal civil war, everything else is just volatility.
However, with volatility its a matter of being able to manage and sustain through its increasingly cyclical amplitudes, the greatest worry is that governments will try to dampen these cycles and throw away vast amounts of public capital. (Corporates are as big as Nations and have their own form of warfare, its shifting resources quickly).
Mac M
The government deficit is at around 100 trillion, when including social security, and medicare. The GDP of the entire world is around 60 trillion. It doesn’t take a mathematician to understand how screwed we are.
seymour
Rick is right once again. But what Rick doesn’t see is the real problem is energy and that energy and money are linked:
http://energybulletin.net/node/48990
Michael Castello
Plan D: Max out your best domains for 10 years registration. Print the whois and laminate them, place them in a waterproof container and bury it high on a hill.
Pertinax
Dear Rick,
Love your blog for years now but first time I comment on one of your post.
I have been seeing this coming for years. Hyperinflation on a worldwide scale is a 99,9% probability. It will indeed be the greatest transfer of wealth the world will have ever seen.
But there is a way to protect yourself. If you don’t have much money: go out and buy some silver bullion. If you have more to spend, buy some gold bullion too. If you are realy rich diversify your portfolio to other commodities, buy a house in Europe and one in Asia.
In my opinion the solution will play itself out in FreeGold which will be a gold price that will free itself from every currency and especialy the $ it is priced in.
In my opinion this will happen over a short term period, perhaps overnight. There is a reason that the gold in FED’s books hasn’t been revalued for dozens of years. Why don’t they mark-to-market their gold?
For most people the coming years will end in tears as they will lose EVERYTHING. Very few will be able to maintain their living standard. And some will become stinking rich too.
Most people don’t understand this hyperinflation thing. It is a very nasty bug. It will deceive you in the beginning as you think the market recovers and will bite you very hard shortly thereafter.
Good luck to everybody
Peter
If your scenario is true, then we will do what the tribes always do, so better buy stock in armourments.
You understood the importance of simple linguistics in the evolving communication systems.
Galbraith understood economics, the”king” is wearing the emperors new clothes on this subject
crinu iliescu
Rick,
Capitalism has defeated, or better said merged with the Communism, since huge governments’ bailouts around the world use the tax money to save the dinosaur corporations from extinction. Capitalism is the greatest Ponzi scheme humanity has created, and we are now living the collapse of the big pyramid of globalization, where no more funds come in to replace the payouts to the fat cats, where dreams and promises do not longer make sense. The solution ? is probably world war 3, where 40-50% of the population will be wiped out of the pension funds and to re-start the Ponzi scheme again, globally. Some folks hinted the return to the stone age, maybe we should go to the Amazon and seek asylum from some indigenous tribes and start allover again, or pay our daily meals at the corner restaurant with domains, like Van Gogh did with his paintings.
crinux.com
william
We believe we can set new standards of marketing and advertising applications. There are other proven ways of generation capital. For the most part the PPC/CPM platform are bottoming out, All domains are feeling the reduced income. We have to fix the system applications, The PPC Industry is having their own problems! before we can revitlize the cash click system. We must fix the PPC problems We can solve the PPC problem, There are developed systems which we can implement Today. What do u think Rick! Wm
Altaf
Rick,
Thanks again for a long post, but you did not give the solutions nor precautions one must take other than 20%…20%..What exactly one must do to safeguard in next year, next 5 years, 10 years plan?
Kevin,
You are right. Invest in knowledge is the key. But for the last 10 years I have been doing that at least 18 hours a day, including reading enormously on the net. But without specific action what is the use of that knowledge if no practical effect is enjoyed from its use & its result. Which specifics you got to know or practice? While Rick or others taught us about domains, we learned a bit about it and so on.. but where is the end game? Tell us what we can do in our next year, 5 year, and 10 year..20 year plans? Tell us which knowledge is the best in this crisis to catch up things.. Be more specific,more insights. I know Rick will definitely tell us that he gave us with all the hints, why do we not understand? Is it enough to get guidance in the wilderness?
Have a nice day!
owen frager
“If there were only one truth, you couldn’t paint a hundred canvases on the same theme.”
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