World’s Greatest Investment Mistake: Real Estate over Gold and Silver

Buy low; sell high.

This is not merely a maxim for the world of investment. As a matter of arithmetic, it is the only, possible way to make a profit, in any market, over the long term. Yet what do we see, in the (supposedly) sophisticated world of the Western investor? We see real estate prices at insane (bubble) highs, yet Western “investors” continue to funnel insane quantities of their financial resources into the most over-priced real estate, in history.

At the opposite extreme; precious metals prices are currently at an extreme/insane low, generally below the cost of production, for gold in particular. This guarantees declines in future production, even as these markets already have widening supply deficits. Yet the Western investor flocks into real estate, but shuns precious metals.

Buy high; sell higher(?).

This is not merely the maxim of idiots, as a matter of arithmetic, it mathematically guarantees that one will lose money in markets, over the long term. It is financial suicide. Yet this is the pattern we see with nearly all (supposed) “investment” today: buy stocks (which are at bubble-highs), buy bonds (which are at even more-absurd bubble-highs), buy real estate (also at bubble-highs) – and hope to be able to sell these bubble-investments at even higher (i.e. more ridiculous) prices.

How do we explain the lemming-like behavior of the Western investor? In one word: conditioning (or “brainwashing”, for those who prefer more direct speech). We have been conditioned, for decades, into becoming momentum-chasing Lemmings, while (equally) we are conditioned away from any activity which remotely resembles the concept of “investing”

‘Buy and hold is dead.’

You could hear that phrase come out of the lips of a million-and-one charlatan financial analysts, following the Crash of ’08. Why? Because all of these “experts” (and their clients) had been badly burned, and completely “surprised” – by that utterly predictable event.

What was the solution of (most of) the “investment community” to their mass, systemic failure in 2008? Did they try to (honestly) ascertain how so many of them could have been so very, very wrong? Of course not. They simply threw up their hands, en masse, and publicly/officially proclaimed that they were ceasing even attempting to “invest” in markets.

Buy-and-hold is dead.

Buy-and-hold is “investing”. The definition of the verb “to invest” is to place one’s wealth into a particular asset class, and then give that asset (i.e. investment) time to mature. If one buys-but-doesn’t-hold, then (by definition) that person is no longer “investing” at all – merely gambling.

Thus we see that the individuals (Lemmings) referred to as “Western investors” are, in fact, merely all serial gamblers. Why is serial-gambling considered to be (and treated as) a “disease”? Because serial gamblers almost always end up in financial ruin.

In the case of Western gamblers, who have been deluded into believing that their gambling is actually “investing”, this path-to-ruin can be very easily described and defined. They are attempting to buy-high and sell-higher. But what always happens to such market gamblers, over the long term is that “buy high; sell higher” inevitably turns into “buy high; sell low” – after the bubble(s) bursts.

How do we know the supposed “investors” in Western markets are now pure gamblers? It is easily proven just by looking at how the markets are presented. Almost always, they are presented via charts. And (almost exclusively) the “investments” being touted by charlatan pseudo-experts are charts with a strong, upward slope.

Look how high the price has already gone. Look how much higher we expect the price to go.