Old Lessons

Old lessons for a new financial crisis
http://money.cnn.com/2009/02/18/magazines/fortune/loeb.fortune/index.htm?postversion=2009021811

- Once in every seven to ten years, there is a period of excessive general speculation culminating in a severe panic or depression when the man who is borrowing money is at great disadvantage and he who has ready cash stands like a tower, four-square to the ill winds that blow.
- Extreme situations do not last, no matter what the apparent justification. While we may have 'new eras,' old laws will still operate.
- Avoid commitments, particularly of the delayed variety; they are more insidious. Also, be definite about commitments made to you by others. When the storm comes, misunderstandings are so easy and so natural.
- In both 1920 and 1929, the so-called 'big fellows' in general said everything was okay. But if the big fellows in general thought otherwise the stage could not be set for the unexpected. Panics occur because the leaders themselves have lost their way.
- Never borrow money without continually reviewing and questioning your ability to pay it back under the worst conditions.
- It's right to be an optimist, but always be prepared for the worst.
- People borrow money in good times and pay it back in bad times - just the opposite of what they should do.
- The public is just as blind in recognizing the bottom of a depression as it is in recognizing the top of a boom. While there is no ladder that reaches to Heaven, the ladder that reaches all the way down to Hell in a country like America is just as fantastic.
- A reputation for fair and honest dealing will be your greatest asset.
- As my father used to say, 'Don't forget, the soup is never eaten as hot as it is cooked.'

Thank you Carol. I will never forget the 'old lessons'.