The Chattering Wind

Wednesday, April 30, 2008

Best way to profit in the long run

Since the US banks needs the cash and are desperate, they will be willing to pay more interest for the liquidity flow. So this is a safe and best way to profit in the long term. US Banks shouldn't fall because the fed is there to be the safety net and they will do anything to prevent the banks from failing. Because a failure will be more drastic. A simple unwinding will be the banking system where money is multiplied many times.

Everyone has been saying water will be the next oil. It will be but water will need to be cheap or else no one will be able to afford it. Therefore, the best way to profit is in the building of treatment plans and the technology but not the water treatment itself. Because if water becomes more and more expensive, governments will need to have price control to maintain price and thus social order.

If you are thinking of bulding wealth for the next generation, investing in technologies for the next generation of energy to replace oil will be the key. But every cycle has its bubbles and at the initial stages, many firms will fail or being acquired. It is similar to the principle where you plant many green beans, not all of the beans will grow into an adult plant, producing more beans. Which means that to find a fund or source to invest in the long term with minimal fees is the key. But sadly, not all are available to the public. That's why the rich get's richer because they have networks where the rich can invest in privately held funds.

The era of enormous gains as enacted by warren buffett may be gone because now, most firms are near perfectly competitive. Current firms that boast strong growth are not sustainable because soon, the production capacity will overflow and will overshoot, thus the business cycle of bust and booms.

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