Wednesday, June 9, 2010

Invest like an Israeli

Looks like Iran will be getting nuclear weapons. Today’s UN resolution levies sanctions against Iran unless they stop their relentless drive to become a nuclear power. Experts tell us the sanctions will not stop them: it’s just a matter of time until Iran’s Islamic fundamentalist government gets the bomb.

The United States has been adamant that Iran should not become a nuclear nation. But it appears the United Nations was less adamant, and the recent watered down UN sanctions against Iran reflect that lack of conviction. Iran will soon be a nuclear power. The Ayatollah will have the bomb. The concept of the car bomb takes on a whole new meaning.

How would you feel if you were an Israeli?

Most of us have no power in world politics. We are pawns. Collectively, the United Nations has made her move. And we pawns will learn to live with it. But the Israelis have a real problem. They can’t afford to be pawns and live with the build up of nuclear arms in the Arab world. They have to have attitude or they won’t survive. And as we see from last week’s news of potential arms smugglers trying to run the Israeli naval blockade of Palestine, they do have attitude. Israel is aggressive in the defense of her territory.

What can we learn from the Israelis? - Attitude!

Let me explain how attitude affects our investing.

Most of us have no power in world economics. In a few days the G-8 and G-20 nations will meet and take some sort of joint economic action. And we pawns will learn to live with whatever they collectively decide. And what will we learn? Does it really matter what they decide? We will have to live with it, no matter what. You see, nuclear war has already broken out in the financial world. In 2008 it was the banks that blew up. In 2009 it was the US auto manufacturers. In 2010 it’s several of Europe’s sovereign nations. G-8 governmental financiers are trying to repair the monetary world after the economic nukes have done their destructive work. And most of us are content to sit and watch.

In my book, Beyond the Bull, I urge investors to adapt the attitude of the financial warrior and abandon the sugar and spice world of bullish optimism.
Let’s not be like the naïve 1930s British Prime Minister Neville Chamberlain who tried to negotiate “peace in our time” with Adolph Hitler. Or the modern day pundits who advise dealing with Iran after she gets the bomb. Or today’s die-hard investors who have bought their equity mutual funds and will hold them no matter what.

It’s about attitude. Do I fight my own battles or do I simply follow the views of some economic guru or financial planner? When there’s danger, act decisively. We are not pawns in our own financial affairs. We do have power in our own worlds. Our opinions and decisions do make a difference in our own RRSPs and our own investment accounts. That’s where we can benefit from a little of that Israeli attitude. How should we act when our personal financial world is threatened by economic instability? Like the Israelis, we need to be aggressive in the defence of our territory.

Our advice is simple: sell your riskier investments and replace them with safer investments. We live in dangerous times.

To order your copy of Beyond the Bull and the Five Levels of Investor Consciousness CD, or to sign up for Ken’s free monthly webinar, visit (Bullmanship Code = SS32).

Contact Ken directly at

No comments: