UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next
Author: junkman02 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35392  
Subject: Re: Hmm, The borrowing, saving inflation Dilemma Date: 12/9/2009 6:15 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
With the exception of the mortgage example, most of the above strategies do not make common sense to folks who were taught to save, to LBYM and to generally manage our household finances with prudence. They are more the behaviors of entrepreneurs then blue and white collar employees. It is an interesting dilemma to consider that living prudently may be as risky or riskier then taking an educated chance on leveraging.

jack
just kicking tires


I think you’re kicking flat tires. How does a person tell that he is in an inflationary environment? When what he could have bought a couple months/years previously is now way more expensive. But when is it cheaper to borrow money? In a deflationary environment. And for whom is it always cheaper to borrow money? When the person is so cash-flush and/or credit-worthy he doesn’t need to borrow the money.

I think your argument is specious and spurious. The real dilemma, as Mamis outlines in The Nature of Risk, is the never-ending trade-off between price-risk and information-risk: “When does a would-be investor know enough to act?” Funding is generally a minor concern (unless one is trafficking in things like carry-trades).

Charlie
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Saul's Investing Discussions

Why Did I Buy a Bunch of PFIE Today?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement