It’s Only When the Tide Goes Out..

..that you discover who’s been skinny dipping.

The famous adage from Warren Buffet is probably more important than ever.

There’s a lot of leverage out there in various places, be it Govt. bonds, Corporate bonds, Student loans, car loans, credit card loans, or mortgages.

Student loans.jpg

I don’t believe that we are on a sustainable trajectory right now.  Not in the slightest.  This is evidenced by the declining marginal productivity of debt.

It’s likely over the coming decade that we will see massive shifts in the way we exist. People are really going to need to tighten their belts.

Now would be the best time to deleverage, own low leverage stocks which produce goods (or services) which are price inelastic and own hard assets, preferably productive ones.

While many people would probably laugh (and have done so).   I see agriculture as the best performing industry of our lifetime.  Everyone wants to be an investment banker or a hedge fund manager.  Luckily I have company such as Warren Buffet, Jim Rogers and Michael Burry.  Laughter and ridicule doesn’t bother me much.

Show me a single civilization which survived without agriculture, and I’ll concede that I’m probably foolish.


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