The greater fool theory; can it make you rich?

Note in the above chart, which we frequently show, that the best investments, global equities, are the only ones producing wealth. Bonds and cash (not shown) can help equities, but they produce nothing new.

And yes, any of the others can make you rich. To do so, these others depend on the greater fool theory. Investors buy them hoping that a greater fool will come along to whom they can sell at a higher price.

I am an amateur violinist. I once bought a violin bow for $3000 and sold it a few years later for $15,000. My equities, including Berkshire Hathaway (BRK), didn’t even come close.  At the start of their careers, some of my professional violinist friends bought a violin for the price of a Toronto house. At the end of their careers, some 35 years later, they sold these violins for the greatly appreciated price of three Toronto houses!

For every bow and violin described above, there are thousands and thousands, the price of which goes nowhere.

The Monday Morning way of investing is the most reliable, evidence-based way to invest successfully. Contact me for details. (705-441-4566 or milan@drmilan.com)