Tuesday, September 30, 2008

Crazy Money Games

Right now, any people are now looking to find their way out of the financial woods. I have simple tastes in investments. I have always felt that any deal too complicated to explain easily is probably meant to deceive. These crazy financial games that involve things like short selling, or betting on stocks you do not own, derivatives, credit-default swaps, variable rate loans, balloon payments, and other arcane creations have come crumbling down. People who have lost money on day trading get more frantic and try to trade some more. The fact that more people lose than win at day trading does not dissuade gamblers, because they dream of winning. Smart people will reposition with safer investments. Clever games will make money for a few, but hurt many.

We need to be careful not to be desperate. There is an old saying among pool sharks. "When you start to shoot with your lunch money, the pockets start to move."

I like investment strategies that are simple and straight forward. Those who go for solid investments and straight up deals will survive. Those who keep going for crazy deals may be lost in the woods for a long time. There are all kinds of ways to make life exciting.

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