Altucher's Back -- and He's Got Stock Ideas

Regular readers know I'm a fan of Jim Altucher's Financial Times columns. No columns were being run for about a month, and I was worried that the FT had dropped him, or he quit the column on his own.

But fear not, he took some time off and the column has been back for a couple of weeks now. Here's the latest:

So in this New Economy, who are the winners? First off, pawn shops are doing great. And when the economy weakens, more people need to borrow money from them. No subprime here. Its sub-sub-subprime - with the main difference being that people leave their collateral at the store when they borrow money, often at a 30 per cent loan to value. Meanwhile, the collateral that they've left at the stores, usually gold, is going up every day in this environment.

He names a couple of names, and check 'em out if you're a subscriber to FT. And writes this near the end of the column:

This is a hard time. It's possible to say: "This time things are different." But we've been through 9/11, the 1987 crash, wars, scandals, depressions, stagflation and the markets always come back to make new highs. Always. This time the world financial system is supposedly going to collapse and capitalism is being called into question. But it's not...

I've posted here several times that Jim Gant is the finest writer in financial journalism. "Just plain words writing," as John O'Hara said of F. Scott Fitzgerald. Altucher at his best approaches Grant. I've never regretted reading a piece by either man, even when I might not agree with everything expressed. And my guess is you won't regret reading them, either.

Comments

[David]

Good stuff. I'm a fan of Altucher's FT column too, and anyone who starts out a piece like this is okay in my book:

http://www.ft.com/cms/s/0/2bd4d3d4-7e04-11dd-bdbd-000077b07658.html

It's good to have a sense of humor, even when it hurts.

[John]

Yeah, self-deprecating humor is the best kind. Thanks for the link, David.

[Brian]

"The markets have always come back to make new highs"

This is true but only from the longest term perspective. Not the cute 5 year perspective you like to talk about, more like 20. After the 29 crash stocks didn't make it and stay above the 29 high water mark until the late 40's for instance. The period from 1966 to 1982 saw 0 net gain on the DJ average, in spite of high inflation. His claim is garbage quite frankly and you should know better.

[kennycan]

How long did it take the Dow to get back to breakeven after the 1929 crash when adjusted for deflation (ie when did the money invested in the Dow regain it's purchasing power)? Bet it was something more like the late 30's.

Same question re 1966 - 82. When did the Dow regain it's purchasing power after an inflationary sprial. I believe it was at east the late 1980's.

So over 20 years in an inflationary disaster but only 10 years in the deflationary Great Depression. So which market was worse?

Also, Mr Market is brutal to the stupid and rewards smarts. When the Dow was crashing in 1929, someone was selling and raising cash. If they eased back in during the 30's, they made a mint in nominal terms and they made intergenerational wealth in purchasing power terms. Mr Market doesn't judge you by the color of your skin, ethnicity, religion etc. It has one bias and that is, are you smart enough to make the right decisions investing in the right companies within the framework of the macro environment.

[John]

Brian: The 5 year investing time horizon I write about isn't "cute", it's the minimum time span. Investing is something to be done over the course of your lifetime. So a 25 or 35 or 50 year horizon is even better. You need to chill, you sound overly emotional.

kennycan: Great points and thanks for sharing them.