Now before I begin, I must emphasis that I am NOT a financial planner, nor do I ever want to be one. I have LJ Financial for that role as they are better placed to advise me (not that I always take their advice), and I can always blame them for my foolish ways!
In this week’s blog, I want to comment on the nervous nellies in the market, and the people who keep using the term mining is dead get out now. Mainly from people driving a car to a restaurant to eat a lovely meal that they booked either over the internet, or their mobile phone.
So permit me to share a story with you
I remember the year it was 1992 and I was living in London. Married and a baby not too far away and then it happened….16th September 1992 and 6 months pregnant when the Conservative government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism (ERM) after they were unable to keep sterling above its agreed lower limit. We had shares as a young family and some were familiar names like Reuters and General Motors BUT I remember the fear when I saw the prices plummet and my thoughts went – lets get out now before it drops further. Well it did drop, and I sold my shares, BUT it also eventually came back, and if I had been really smart (like George Soros when he shorted the British pound that day) I would have bought more shares rather than selling them when everyone was panicking.
As Warren Buffet wisely said and is always quoted “be fearful when others are greedy and greedy when others are fearful”. Well I am constantly listening to people’s fear about the world, shares, property bubbles and life in general.
I am getting a little tired of reading the constant doom and gloom of the current media pack, and the fast delivery in today’s fast paced information age that we all need to sit in “safe havens” and not take risks. Life I think is about taking calculated risks but certainly taking some risk.
If we all keep saying that mining is dead and we all put our money into the bank earning a high 2.9% interest to be safe, we will just about be going backwards! Humans are a funny lot, they tend to buy at the top and sell at the bottom. Mining, in my humble opinion, will always have a market. Commodities such as tin, nickel, iron ore and even the currently hated coal sector are all needed for this modern life we lead. Unless we all want to go back and live in caves (and I dare say there are some that do want to do that and good luck to them but not this little black duck) then the demand for commodities will not be diminishing in fact it will only increase.
At the moment, we complain about the Chinese coming and buying up our resources – I want to shout out to all Australians and say stop complaining and start supporting. And when the support starts to come back, then the markets will start to move and we will all start to feel a little bit better about everything. Even those not in the mining sector, because when mining does well in Australia so does the rest of Australia
So Australia stand up, and be proud and stop moaning that its the end…this is just a new beginning.
Until next time,
Managing Director, Symposium