Value Investing
In the 1920s, a soft-spoken investor named Benjamin Graham did not follow the market herd, buying everything he could just because it was going up. Instead, Graham quietly developed his own measure of quality which he called Value Investing. This method compared the value of a company’s assets to its selling price.
The result was that following the crash in 1929 when most speculators were wiped out, Graham’s investments were stable and some even grew. Graham eventually became a professor at Columbia’s School of Business. One of his students seemed to see the value of researching a company before investing in it. Graham hired the boy as his only employee, a young Warren Buffett.
Growth Investing
By the 1960s, the top investors moved away from “value” and asked different questions. “How will this company do in five years or ten years? In five or ten years will Coke-a-Cola be selling more or fewer Cokes? In five or ten years will more or less freight be shipped by rail?” The Growth Investor bought into long-term trends and let them ride.
Spectator Investing
By the late 1990s and early 2000s, we saw the coming of the Spectator’s Market. Unlike Value or Growth Investing, Spectator Investors bought anything that looked flashy. Did it work?
Remember pets.com, icecreamscoop.com. or internetinabox.com? These and others were 100% losers for their investors. When the Dot Com bubble burst in 2000, Nasdaq lost 78% of its value in just 60 days.
Today’s Investor
Welcome to the 2020s. Today is not Value, Growth, or even Spectator Investing. What we are witnessing is Follow-the-Other-Guy Investing.
- American Airlines is going up – Grab it.
- American Airlines is going down – Dump it.
- Wynn Casinos is going up – Grab it.
- Wynn Casinos is going down – Dump it.
Stock market investors are no longer doing careful research about the companies. They are not attempting to project future earnings; meaning they are not considering company quality. Instead, today’s investors are playing musical chairs. Remember when your mother said, “Just because someone else jumps off a bridge doesn’t mean you should too.” Mom was right. This market is more akin to musical chairs than it is to careful investing, and eventually, only one person will have a seat.
Invest in what you know
A Self Directed IRA allows you to make stable investments such as real property. Unlike many IRA companies, IRA Club allows the IRA owner (you) to select investments that are best for your future. The IRA Club does not place artificial restrictions on your investments. This allows for an opportunity for enhanced returns. Check out IRA Club’s Investor’s-Row for a list of alternative investment providers.
-Dennis Blitz, IRA Club President
For information about the Self Directed IRA or Solo 401k, and how we can assist you, please call IRA Club at 312-795-0988. We can share our experiences with various real estate investment providers.
Be advised that IRA Club does not evaluate, review, monitor, recommend, warrant, guarantee or otherwise endorse the legality, tax treatment, propriety, performance or reliability of any investment, service, statement, opinion or other representation provided with respect to the investment opportunities listed on its site or their sponsors or providers. IRA Club has no financial arrangement, partnership, joint venture, or other affiliation with the sponsors or providers of these investments. IRA Club shall not be liable for any misinformation, misrepresentation, negligence, act, omission, investment results, or any wrongdoing with respect to any of these investments or their sponsors or providers.
