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Richard J. Maybury portrait

Buy The No-Brainers

By Richard J. Maybury


From the Sept - Oct 2012 EWR

Feudal lords, kings, fascist dictators, socialist dictators, emperors — does anyone really think these personality types have vanished? Or are these types still among us, wolves in sheep's clothing, working as politicians and bureaucrats all over the world?

This is one reason the most important piece of advice I can give is, diversify, diversify, diversify. In this global economic disaster that has been engineered by people who have more power than judgment, it is unrealistic to expect to save absolutely everything you own.

The feudal lords and their ilk are still around. Wide diversification gives you a realistic chance to save a lot of your wealth, and maybe even hit a bonanza.

The tyrants won't spread their destruction uniformly across the globe. They will miss some areas, and touch others only lightly. (If only it were possible to identify which ones.) Some areas will become havens into which wealth will flow, and if you are invested in them, you will benefit. This will require, however, investing in hundreds of places.

There's an easy way to do it. Here's how.

First, to the extent you can, diversify your residences as well as your money. Scatter your assets all over the globe, in hopes that some will be outside the economic blast zones. A lot of these lucky assets are likely to appreciate as their competitors are destroyed.

Best are countries that have a Common Law heritage or something similar. For residences, my top picks at this time are Canada, New Zealand and Switzerland. Common Law principles give these lands a better chance to emerge from the turmoil quickly.

As far as geographic diversification for your money is concerned, you may already have some without realizing it. There are US "household name," companies familiar and comfortable to all Americans, that own land, factories, offices, machinery and other real "stuff" world wide. You may already have some.

They are so widely distributed that in law they may be American, but in terms of real economics, they are global with no home country at all. There is nothing more American than, for instance, Procter & Gamble, yet the corporation does business in roughly 180 countries.

A stock is a certificate of ownership, a deed. Even if the financial industry is completely destroyed by governments, it will restart eventually — either that or we go into a dark age — and your stocks will still be certificates of ownership for something.

In other words, these non-dollar assets are not mere paper, like bonds or CDs, they are real stuff — buildings, equipment, etc. When currencies dry up and blow away, these things won't.

We have no way of knowing which countries will be hit savagely, and others hardly at all, so the household name multinationals are better suited to adapt than any other type of investment I can think of.

The no-brainer foundation

The governments of Bosnia and Serbia may hate each other. Likewise for those of Israel and Egypt, and India and Pakistan. But the people working in, say, Procter and Gamble's offices in these countries are above that. They are all on the same team, working toward each other's success.

In other words, multinational corporations are what the United Nations claims to be — people of all races, religions, nationalities and ethnic groups trying to help each other instead of kill each other.

The UN is a laughable failure. Wikipedia lists 36 ongoing military conflicts, some of which have been raging for more than fifty years.

But when you buy stock in a privately owned, capitalist, household name multinational, you are buying into one of the most successful and adaptable forms of organization in all of history. If capitalism were allowed to work, these are the types of stocks that would be the no-brainer foundation of every investor's portfolio.

I examined the 100 top household name companies, and judged the four below as the best for riding through the economic trouble I believe is likely over the next five or more years. No matter what happens, some of their assets should survive and perhaps even earn big profits.

Mr. Maybury went on to make several investment suggestions which have all done spectacularly and are still in our recommended portfolio.

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