Subject: Bernard Baruch Quotes Applied to Today
"Never follow the crowd."

"A speculator is a man who observes the future, and acts before it occurs."

"Never pay the slightest attention to what a company president ever says about his stock."

"We all did not come over on the same ship, but we are all in the same boat."

Barnard Baruch comes to my mind in reading all the posts posited here the past few days. It is hard not to have negative thoughts about a lot of things. I know I do. I also am having to expend appreciable mental energy in recasting my thoughts towards possible beneficial future investment decisions. Like many of you on this forum, two to four hours a day are typically spent in reading financial articles, podcasts, newspapers, Value Line and other information sources, yet I seldom buy or sell. Am I concerned about our holdings both in public stocks and our private company? Yes, I am. Can I do much about the larger environment? No, I cannot. I study so as to be ready when the proverbial organic mammalian waste products are sucked into a high speed rotational air movement machine.

Many years ago in an MBA class, a professor admonished us as to how managers absolutely abhor uncertainty. This same professor also pointed out the overriding job of a manager is to allocate scarce resources. We were all busy writing notes to later regurgitate on a quiz and it did not mean much to us then. Today I see those two instruction as being quite profound. Scarce resources can be time, money, attention, personnel and other things crucial to an organization's continued success or continued existence. In our 40 plus years of business operation, our small business tended to feel recessions early. Why did we feel recessions early? Our products were specified into new construction and renovation projects. Whenever there was uncertainty as to interest rates, a looming potential change in depreciation schedules or the specter of a coming business slowdown, our orders would slow down. Simply put, the uncertainty those managers and project investors were seeing or feeling slowed or stopped investments and companies like ours had fewer orders as a result.

We are living in a heightened period of uncertainty. The Federal layoffs, tariff issues clouding pricing and availability, reduced tourism (fewer Canadians visiting Florida and Myrtle Beach)and a host of other things now in limbo collectively sooner or later will result in a firm tap on the GDP brakes. Hard taps on the GDP brakes usually brings about large stock market declines.

It is a good time to prepare in advance for pouncing when the organic waste is sucked into the big, spinning fan. I've got my favorite stocks list and this time, when we are in the depths of the recession, it will be our Berkshire position getting trimmed as we add quality companies with screamingly cheap valuations compared to Berkshire. My gut says a big market decline is coming and while Berkshire will be hurt, it won't be hurt as badly as many other quality companies. The job now is to identify the quality companies for holding the next twenty years. Berkshire's increasing valuation the past six months may be telling us there is a flight to quality because the market is becoming fearful. Besides, Berkshire's run up the past year has pushed its share in our portfolio to a higher than logical percentage. We will keep riding it for the time being as we see where things are headed.

How about you? Besides those looking to leave the USA, are there folks here continuing to evaluate potential investments? Am I alone (and possibly the crazy one) in doing research now for being ready for future blood in the streets?

I'd love to hear your thoughts pro or con. Like Bernard Baruch said, " .. . . . we are all in the same boat".

Uwharrie