Friday, August 26, 2011

World's Worst Investment

The US Dollar may be the worst investment in the World.  Think of a Dollar as a stock certificate (for those old enough to remember what they look like).  It signifies that you own a very small piece of the USA.

The problem is that the CFO (Ben Bernanke) can issue new shares any time he thinks the corporation needs extra cash.  For shareholders (you people with cash) that is DILUTION.  That means your shares are constantly declining.

The worst of the worst investments are those "Convertibles" (Treasuries) that pay a puny 2% taxable income and convert back to "USA Common Stock" in 10-30 years, when the stock is guaranteed to be worth 50-80% less than it is today.

Shareholders of the USA don't really appreciate their ownership, and they can't seem to make up their mind about management.  Management continues to add more and more people to the payroll, in spite of declining sales per employee.  And all the different divisions can do is talk about whether to lay off people (the Republican approach) or borrow more and give everybody a raise (the Democrat approach).  Thus the corporation and the value of its shares continues to decline.

The company needs new management, some visionaries that understand we need a better strategy to motivate employees and stimulate sales.  Until this happens, the shares are a SELL.

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