“It took us three years to find someone to manage our wealth, and we can now sleep at night! ”

Darren and Ruth Johnston (Semi-retired entrepreneurs) (N Wales) (2011)

Greece is the word

Posted by jdavis on April 21, 2015

Doubtless some readers will be coughing in their coffee after reading that title.

"Greece???  It's a basket-case isn't it.  I wouldn't touch it with a bargepole!"

Exactly.  The smartest investors in the world have acted on a very simple strategy since time immemorial.  Baron Rothschild in the 19th Century said it most clearly and many others have said similar since "Buy when there is blood on the streets."  In other words when everyone has been selling and losing their shirts and there is depression in the market THAT is when you want to be interested.

Note the past tense 'has been selling'.

That is a market which is 90-95% down on 2000 - 15 years ago.

You see also the market has fallen over 50% since last year, alone.  They are selling like crazy.

Is there metaphorical blood on the streets?  Oh yes.

Has this market long term profit potential?  Oh yes.

Why?  Because nothing goes in a straight line and all crashing markets either go bust or reverse.  An entire country stock market cannot go bust.

The fund, in which we have initiated a small holding, includes the National Bank of Greece.  10% of the fund is the NBG.

This company is very interesting for 2 reasons, from an investing point of view.

  1. It makes more than half of its profits outside of Greece.
  2. It is dual listed in Athens and New York.  In 2007 the share price was c $650.  Look where it is now.

Yes, approximately $1.

The risk is it goes bust.  Or it goes to the moon.  If it were going to go bust wouldn't it have done so by now?  We wouldn't be surprised if it turns out to be the latter.  On verra.

Now, THAT is what I call buying low.  And buying low invariably reduces investment risk.  Is that what you do?  Why not?


Yet some people will still not invest in Greece even though it is ridiculously cheap?  Go figure.  Apparently, I'm told, it's risky.  I've obviously not been successful in explaining risk minimisation well enough.

One other thing, the Greek economy is no longer collapsing.


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