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Uriah Av-Ron works for Oasis PR and is based in Tel Aviv, Israel. You can contact him at uriah@oasis-pr.com.

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Forget Wii, Invest in NTDOY

Written on
Dec 22, 2008 
Author
Uriah Av-Ron  |
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Forget Wii, Invest in NTDOY

knife_recession_small.jpgADOTAS EXCLUSIVE — I am tired of all of the doom and gloom out there. I understand that the problems in the economy are severe, and that everything is related to everything on a micro and macro-economic level.

But I think that there is something we all can do. We can buy some stock (or commodities or foreign exchange). We might not directly be responsible for the mortgage and credit crises, but we can do something to turn the markets around. Or to quote this year’s marketer of the year, ‘Yes we can!’

As someone who survived that dot.com / telecom bust of 2000 – 2002, I look at the silver lining of the current crisis. It’s not a technology / Internet crisis. In fact, the fundamentals of these technology markets are essentially good. That said, there is a greater problem in the economy as a whole. And believe me, I understand that. I too have clients cutting and eliminating budgets. But I also believe that we, the people, can do something about it. We can decide to invest in the financial market of our choice.

Now I’m not telling anyone to take a second mortgage on the house in order to buy stock (and it’s not that likely that any lender will give you a second mortgage today to buy stock). But instead of buying an extra book or toy or DVD player, why not invest a little in our economy. Why not buy a stock of a company you love whose products make your life better?

After hearing naysayers puhpuh social networking as unmonetizable, President Elect Obama showed them all by raising millions via the web and social networking. And the only Return On Investment from that investment is a better president (which isn’t a small thing). Here you have a real opportunity to actually make some money.

So this holiday season, instead of buying another game for your Wii, why not buy NTDOY instead? Or invest in commodities or check out foreign exchange platforms from etoro or FXcm.

Because together, we really can do something about the economy.

NOTE: This article does not represent the views of Adotas. This author is not a financial advisor nor does he own stock in any of the companies mentioned in this article.





Reader Comments.

Um except “buying an extra book or toy or DVD player” is investing in our economy. Am I wrong?

Posted by common sense | 12:42 pm on December 22, 2008.

@common sense

It’s kind of a mixed bag here. On a macro scale, capital needs to flow, but part of that flow needs to be saved along the way.

Imagine a world where everybody spent every penny they earned with no regard for “rainy days”. Imagine if your boss was two paychecks away from ruin, like the average American is today. Rather than keeping your next month’s payroll in the bank, your boss runs off and hires more people under the assumption that he’ll have enough money in the bank come next month.

It’s pretty obvious that this world would collapse shortly as something would go wrong.

But the inverse isn’t any better. Imagine a world where everyone saves 25%+ of their income. Now imagine being a lender in this world. Imagine not being able to get any interest from the bank because the bank can’t lend your money to anyone else. And why would they need to? Everyone else is saving 25% of their income, so we all have money in the bank. And if someone actually did want a loan how much interest would you get anyways? With so many people competing for loans, the rates you earn would be low.

Obviously this world has its issues too (see modern-day China). It’s pretty clear that a world with zero debt would be a little crazy.

So let’s look at the numbers. The US economy has had a negative personal savings rate for the last couple of years (though it may have reversed this year). The US government has been running a deficit for a decade with a ballooning debt load.

The US economy has a heavy case of “spend every penny”. Lots of people “printed” money by making promises they couldn’t keep: CDSes, Mortgage-backed securities (on over-promised home value with balloon mortgages), failing corporate bonds (Lehman Bros), failing insurance (AIG), the collapse of “commercial paper”.

At many levels, the problems companies face right now comes down to a lack of cash. GM, when talking about the desire for a bailout, is talking about having 3 months of cash left for payroll. The reason for the $700B bailout was to provide cash flow to these institutions that simply didn’t have enough available.

I know it sounds “un-American” to save money, but Uriah has it right here. Yes, companies want you to spend money, but what the economy really needs is a positive personal savings rates.

For the average person, that means throwing a little extra money in “the markets”.

Posted by GVP | 9:38 am on December 23, 2008.

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