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Friday, September 18, 2009

Some investment (and moral) advice from Doug Casey

Doug [Casey]: I'll tell you a true story. About 15 years ago, I was at a luncheon group that meets every Friday in Aspen. Bill Bennett, the former "Drug Czar," was the speaker. After he gave his perfectly horrible speech, the guy who was moderating knew my mind, so he called on me to ask some embarrassing questions.

L[ouis James]: I remember seeing Bennett tell a TV reporter that he didn't need drug laws to stop him from abusing drugs, but that "people" did.

Doug: That's him all right. So, of course my question turned into a denunciation, and his lackeys there were booing and hissing at me. Anyway, one thing he said that was very interesting was: "Buy stocks in prison companies – we're going to be building a lot more of them."

L: He actually came out and said that?

Doug: He did. That's a fact. And it was actually good investment advice. Though it also showed me the guy's basic character, which I see as a deformed, criminal personality.

L: Suppose you were convinced that shares in a company in the business of making devices for eavesdropping on people in their homes were about to go to the moon – would you actually invest in such a company? You wouldn't feel any moral qualms about it?

Doug: That's a good question. I certainly wouldn't buy stock in an IPO of such a company, because then I'd be actively capitalizing it. I don't want to be selling the rope they'll use to hang me with – as Lenin, presciently, said the capitalists would do. But if I bought the stock on the open market, my payment would go to a private individual, and I'd be making my money off some other guy that came along later. Although, I admit, that’s just a rationalization…

A good speculator should look at the financial aspects of a deal and not let psychological squeamishness get in the way. That said, I have to admit that there are some deals I just wouldn't touch.

But, hell, you can make a moral argument that you shouldn’t buy T-Bills, because they will be repaid with stolen money – taxes.

-- from "Doug Casey on Political Correctness" (interview by Louis James, Editor, "International Speculator")

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