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For the Lack of a Compass

from The Reaper

The Reaper's note: The head leads the body. The leader leads the followers. Our present leader, Bill Clinton, lacks a compass, or if he has one, it is continually spinning 360 degrees. He's ungrounded, rudderless, and so the country accordingly drifts directionless, without values, without moorings, Bill Clinton is a Machiavellian reactive. Amoral pragmatism best describes his compassless wanderings through the miasma of life. And so, too, the country gropes to find its way, not facing or confronting the challenges that continue to build against this nation. It is a somber time for men who have historical perspective and foresight.

In this regard, perhaps the best we can do is make sure our own house is in order, take care of our own investments, and be grounded and sure in our personal direction. An old friend of mine, an international money manager, has again penned another lead article for The Reaper.

* * *

In the annals of recorded financial history, one would be hard pressed to find an era as dominated by sheer global confusion as we witness today. For despite the overflowing 'information superhighway,' the deluge of economic prognostications, the political analysis and investment advice by the pound, an average thinking person is still overwhelmed and confused with the growing global political and economic vacuum in which we find ourselves on the eve of a new millennium.

Something is wrong.

Those who have learned to navigate in the open seas or in the air, will attest to the undeniable need for the standard of a magnetic compass. They will also remind us that despite the general accuracy of this simple instrument, one can get hopelessly lost, unless he first determines his position. They will further advise us that even knowing where one is and where he is headed, he is surely to arrive far from his destination because of the effect of wind patterns along the journey. These are invaluable things to know before one sails or becomes airborne and they form a fundamental benchmark of knowledge of preparedness of an aspiring pilot.

The navigation analogy fits our problem. No matter what aspect of life one chooses to examine, he will fail for the want of a compass. Whether we look at current events from the perspective of financial matters, economic policies, moral and interpersonal standards or any other yardstick, we fail to find this most elementary and simple instrument.

And thus, we drift along, not necessarily in the direction of where we set sail, but following others, who are following us. We don't really know where we are. We readily dismiss those who even suggest that we might be lost. Moreover, we have no collective destination. We don't even set sail to anywhere. We find ourselves at sea merely trying to outrun the ship next to us, none of us knowing where we are going.

The words 'risk', 'profit', or 'investment' no longer have any meaning. In fact, words don't have meaning at all. We can lie and cheat to our heart's content because the fear of consequences has disappeared. The words are meaningless, therefore the actions are justified only to us.

We know people who have abandoned their jobs or professions for the sake of 'day-trading' in the stock market.

We know people who have mortgaged their houses to the maximum, borrowed further money and use it to 'invest' in the stock market.

We know people who are sitting on huge paper profits and think of it as 'money' or 'wealth'.

Most, if not all of these people do not even know what money is or where it comes from. Another word that has lost its meaning. And so it goes.

Whether you are an individual who has endeavored to 'save' (please look it up in a good dictionary) part of his income or 'protect' his wherewithal, or you are a 'professional' (a dictionary helps here as well) entrusted with investment policy for the 'savings' of those you serve, consider our analogy carefully and pretend you are sitting on the left seat of an aircraft or the bridge of a ship. The position demands answers to the following four questions which we ask ourselves often and recommend them to you as well:

1. Do you know where you are going or are you merely following other vessels around you?

2. Do you know your current position?

3. Do you have a reliable compass to guide your steering?

4. Do you have the knowledge to navigate to your destination in view of the strong winds?

Your truthful answers to these questions are certain to have an unimaginable importance and consequence. Ask them to your investment and portfolio adviser or your mutual fund manager.

The Reaper is intended solely for the use of its subscribers, knowledgeable, sophisticated and well-informed investors and speculators, who are aware of the inevitable mistakes, errors in judgment, fallibility, and risks inherent in forecasting and investing. Information contained herein is gathered from sources believed to be reliable, but cannot be guaranteed as to its accuracy or completeness. Past performance is no guarantee of future performance, future success or profitability. Readers must invest solely at their own risk. Principals and/or employees, associates, agents and friends of The Reaper may have positions in commodities, futures, options, and any and all other investments referred to herein. Due to the inherent volatility of the futures markets, opinions and recommendations are made subject to change without notice. This newsletter is not intended to be either legal or accounting advice. Consult your own attorney or accountant in this regard. This newsletter does not offer personalized investment advice. Reproduction or copying of The Reaper is not permitted without written consent of the editor.

from The Reaper / R.E. McMaster, Jr., Editor

As originally published in The Reaper Vol. 23, No. 30 & 31, July 7, 1999


©1999 A.N. Inc. (International) No further reproduction without permission.

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Reprinted by USAGOLD with permission.

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