From Robinhood to Aesop’s tortoise - real world and fantasy co-mingled
And note on silver- you only win by selling, you only lose by selling!
If you know how to make money without laying out any capital in the first place- then you are an experienced investor. Inexperienced investors might want to know whether the current GameStop/Robinhood story affects them or not. Confusion created by the investor return spectrum. At one end the likes of the real world/fantasy of Robinhood, and at the other end the fable-turned-real in Aesop’s tortoise.
The ends of the spectrum are distinguished by two features: time and tangibility. Let's focus on tangibility; I recall a talk by Jupiter’s Edward Bonhom Carter the day after the Lehman’s crash. He explained to his wife that “trillions of dollars had been wiped off of the markets”, his wife’s alleged reply: “was it there in the first place?”.
Great question which we might liken to the reality of owning a property with its roof-over-the-head tangibility, versus an off-plan property which is yet to be built and tangibility restricted to a drawing. No good of it rains.
For the inexperienced investor- our message is “stay calm, stay invested”. The Mondial logo serves to feed the Aesop fable of beating the hare. There is no intention “to get rich quick” . A philosophy reflected in the Mondial Investment Strategy in which asset allocation isdesigned for improving purchasing power over rolling economic cycles.
Importantly, it means that the underlying asset selection is driven by Core Fund Managers who focus on buying the house and not the drawing. Values may go up and down but the companies are real. Core funds drive Mondial's investment strategy.
The non-core funds may include some hedge fund choices. This brings us closer to Robinhood and the GamesStock story. The Guardian Link (LINK HERE) carries an excellent overview explaining the nature of short-selling. Importantly, it makes the point that you can’t effectively “short” a good company because it will trade its way out of valuation issues as those selling/shorting would ultimately lose. After all, for our inexperienced investors, if you and I are running a successful and profitable company and our share price is falling- do we care? We are still in business we are making money - we may even buy more of our cheaper stock!
The message in all of this: at Mondial we seek to keep things real. We chose asset managers who buy real and tangible assets with real profits. There is still risk. Companies might fail, underlying choices suffer from human error. But, we do not select fund managers who focus on short term speculation. Ultimately, the world of shorting markets is a speculative tactic- suited to the investor who loves the race track and not suited to the tortoise who is destined for a future finishing line.
Let's take this discussion further, schedule a complimentary consultation with one of Mondial's prominent advisors at +971562228535 or email us at info@mondialdubai.Com
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