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David Hague

David Hague

David has divided his time unequally for the last 30 years between the financial services, education, writing and comedy. He has spent time in financial…

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Corrupt and Rigged Markets Demand a Different Strategy

Dear reader, surely, I do not need to restate the litany of financial and economic events that lead one to the inescapable conclusion that the markets are hopelessly rigged against the investor.

Rather than worrying about the loss of integrity and innocence in the market let us learn and profit from it.

Clearly it is a waste of time reading financial statements. These statements are now irrelevant.

There are only five things you need to know before you invest.

The first thing item to know is the efficacy of a company's lobbyist at securing contracts from the government. Lobbyists are the key to a company's success. Find out if the company's lobbyist is well connected in the halls of power. Does the company have lots of ex -politicians, civil servants and their family members working for them? Has the lobbying firm been indicted recently? [This is not a bad thing it simply means that the lobbying firm is willing to think 'outside the box']. Can the lobbyist prevent competition from other companies from reaching the market? Can the lobbyist secure a bailout, oh sorry, I am being politically incorrect, let's call it a 'To Big to Fail Market Stability Supplement'

The second key aspect of a company that you should investigate is CEO compensation. You should ensure that the CEO of your selected company is being paid at a minimum, 1 gazillion dollars per year. The more money a CEO is paid is a reflection of the complete control the CEO had over the board and the shareholders. This means that if an opportunity arises to have government enact laws favorable to the company the CEO can act quickly to ensure swift passage of the legislation. Ridiculously high compensation for a CEO should be viewed as a good thing.

The third aspect of a company you should research is whether the company is domiciled and does business in a country whose government has embraced perpetual money printing, perpetual deficits and debt. This leaves the USA and Europe wide open for investment. Do not worry about elections and whether the government might choose to follow a different course. History teaches us that once this direction is chosen, like Thelma and Louise's journey, there is no turning back.

The fourth component of your research on a company must ensure that regulators that monitor your prospective investment are inept and captives of the industry they regulate. This leaves most of the world wide open for investment. Inept regulators ensure that the companies you invest in will not be bothered by pesky lawsuits and requests for information.

Finally, ensure that you are clueless as to how your advisor is paid or motivated relating to the investment being considered. Individuals who worry about advisor/broker compensation and motivation are quickly filled with suspicion and self doubt.

Dear reader, with this knowledge you may now call you broker and start to invest, if you dare.


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