EIF is a classic example of what happens when good companies grow too fast or expect to be able to grow continuously at the same pace. Its happened before and it will happen again. It is easy to fall into the trap of over-confidence. There's only one world out there, and only so many business opportunities in our competitive culture.
But what about the future?
I'm no guru, been around for a long while, made too many mistakes, but made enough good or lucky moves over and over again to survive.
I guess that makes me pretty normal - we all muddle through because we have to - such is 'the stuff of life'.
I do know a couple things though:
1: The Euro mess will sort itself out and will find a new level. It may not be pretty and a lot of people will suffer, but that continent is, on the whole, a massively wealthy and powerful entity.
2: China will slow down. Ummm, isn't the normal business cycle 4 to 6 years or so? Personally, I see China as the most affluent and powerful country in the world soon - not as their individuals, but certainly as a nation.
3: The United States of America. Thats a tough one, but one thing is for certain - they are blessed with good infrastructure both naturally and historically. I'm referring to their financial institutions, their geography, their resources and their overall assets. Unfortunately it is on a ruinous path that will leave their people considerably poorer than the rich one percent. However, it will survive in some form.
4: I have no doubt that a loaf of bread will be 9 bucks in the future. I don't know when exactly, but events of the last few years and all those dollars printed have commanded it. When that happens very few of us will be eating Kobe beef.
5: 2012 will be a tough year and so will 2013. And possibly 2014. I don't know anybody who would argue about that.The financial "Captains of the World" have been kicking the can down the road for long enough now so that we have the same situation that Sisyphus found himself in. see: http://www.mythweb.com/encyc/entries/sisyphus.html
6: I see no alternative but to remain carefully and cautiously invested if I am to survive with a nice standard of living during the few decades. People who read my occasional posts know of my common sense "steady Eddie" stocks that will continue to have reasonable cashflow. Having said that, I have to watch, read, observe and anticipate constantly.
7: Cash: Its safe for now, but serves little purpose but to exist in itself. But, when inflation hits it best be deployed correctly. Most investors have a little gold.
8: If I give up and go fully into cash I am at the mercy of those who are elected to look after our best interests. Well, better leave that one alone.
9: I am confident that if I stay alert, positive and opportunistic I have a good chance to be both happy and comfortable. After all, any other alternative is not acceptable. Life is not a rehearsal. I must be a fighter at all times if I am to survive in the markets.
10: I am truly fortunate to be a Canadian.