A Look Back at the Great War

January 6, 2007: On the eve of the anniversary of that horrible Sunday morning when American radio networks blasted the news that Pearl Harbor had been bombed by the Japanese and America was at war, I can’t help but think how lucky we are to be citizens of this great country. I find it hard to watch some of the historical pictures of our battles in that war and see just how great this Country’s young men were to go off and struggle against incredible odds against an enemy that had no sense of what it is like to live in a free society. When I read the letters to the editors in today’s papers or listen to young commentators on TV talk about how horrible it is for President to have sent our military to fight against a radical Islamic force determined to cause death and destruction of peaceful people, I can’t help but wonder, What would these people have done if they had to confront the likes of Hitler or Tojo in the early 1940s. Our local paper has a daily column accounting for the number of solders killed in our fight against the Al Queda each day. Now that is approaches 4000 over the four year period we have been at war, it is interesting to compare the number, sad as it is, of men killed in combat in Iraq with the hundreds of thousands we lost fighting for freedom back in that great war. We lost over 6000 soldiers and marines on the first day of battle on the island of Iwo Jima. Millions were killed in the Russian defense of its country although some say Stalin killed half of that number in surprising opposition to his leadership. With the weapons we have in our fight against terrorism, we have been extremely successful in terms of minimizing the loss of life. If the question is should we have put any of our troops at risk in the fight against actual or potential terrorist nations, I say you bet we should. This president may have his weaknesses, don’t we all, but he is adamant about protecting the security of the citizens of this country and for that I honor him.

The World economies are changing fast as nations in the far east, Europe, South America and even the Mid-east are finding that the capitalistic system generates real wealth and opportunity. India, China, Thailand, Australia, and even Vietnam are experiencing extraordinary growth in their economies. Europe and Eastern Europe, even Russia are all enjoying the taste of free markets and competitive capitalism. These countries in the far east have such huge populations, it is easy to overlook just how fast their growth in output can rise. Their demands for the world’s raw materials is huge now and will be ever increasing as the twenty-first century evolves. For the investor, it is both an extraordinary opportunity to be involved and yet presents a huge risk that the markets get out of hand as the people of this area begin to compete for a better life. The security markets in China and Vietnam are yet to have controlling agencies like the SEC and there is less transparency than one would want facing the risks of such dynamic growth. Nevertheless, American Companies, are experiencing above average growth in their business, somewhat stimulated by the relatively weak dollar. Interest rates are historically low here in the U.S. and still we find our financial system is facing a huge threat from the consequences of the collapse of the sub-prime mortgage market and the affect that it is having on the prices and sales of residential real estate as well as that of new construction. The weak financial situation in mortgages extends well beyond our boarders as many of those mortgages have been bundled into securities and sold to investors all over the world. Many if not most of the major banks both here and abroad are facing real problems valuing their investment assets. It could get a lot worse before it gets better, time will tell.

So what do we do about our investments? Check out our model portfolio and see where I have allocated capital for investment.

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One Man’s Opinion — Bud Brewer