Rational Advisor

You have to have 2 key things for a company to be successful
1) liquidity
2) Trust

If you do not have trust you are dead! it’s that simple.

Ask yourself do you trust looking at the balance sheets of the companies you are invested in or work for.

Realize that most companies out there have some debt. debt/Credit has been around in millennia. The creditors have to trust that the debtors will pay the money back.

Much of the problem we have in the markets now, is because of this lack of trust. Banks don’t trust that people will pay back the money that was lent to them, shareholders don’t trust executives who they lent money to build the companies.

We would never have gotten into this mess if we had trustworthy people, the Benjamin Franklins of the world.

The issue is that there are just too many people seeking the easy way, investment companies were too busy being the market makers, CEO’s and money managers were too eager to be the shakers and movers in the industry as opposed to good stewards of other people’s wealth. Investors were too eager to get instant returns and measuring investment managers by 3 mos, 6 mos, and even a year! it takes time for businesses to earn a profit - first they manufacture, then they market, then the sell, then the proceeds come back to the company and then you determine the profit! This does not happen in 3 mos!

One of the most important thing to realize is to know who are your friends - know who you can trust! Figure out who your friends are - and aren’t. This isn’t about who you like. Its about who you can trust with your back - no questions asked. If things get bad the second-to-the-last thing you want to be is alone - right before being around anyone who is less than 100% trustworthy. Think about this point long and hard - this doesn’t mean dumping acquaintances now, but it does mean knowing who you group with if you need to - and who you avoid.

Trust is wealth beyond measure.

If you are in an organization or belong to a group, or have someone you can trust - you have wealth beyond measure. And I am not talking about a moral or spiritual belief. I am saying that trust is wealth.

I trust many of the people around me, and they trust me - it goes both ways. You just can’t have trust one way. You have to live up to your end of the bargain, and do what you say even when it’s painful - that’s real wealth.

People are looking for people they can trust, and trust is a commodity in short supply, but high in demand.