Originally posted September 14, 2020.
Imagine sitting under a palm tree, toes in the sand, gazing across a turquoise sea with not a care in the world. Wouldn’t it be nice to feel like this most days of the week rather than only on vacation, especially in times like these?
Now, I know it’s not exactly practical, even if you have a tropical island as the backdrop of your Zoom calls. But you’d be surprised at how much island life is right in front of your eyes. For example, when it comes to investing, my favored Prudent Man certainly stands alone as an island far away from your everyday stock traders:
For years my father-in-law Dick Young referred to the Prudent Man in his monthly strategy report, Richard C. Young’s Intelligence Report. As Adam Smith wrote in “The Theory of Moral Sentiments” (1759):
The prudent man always studies seriously and earnestly to understand whatever he professes to understand, and not merely to persuade other people that he understands it; and though his talents may not always be very brilliant, they are always perfectly genuine. He neither endeavours to impose upon you by the cunning devices of an artful impostor, nor by the arrogant airs of an assuming pedant, nor by the confident assertions of a superficial and impudent pretender. He is not ostentatious even of the abilities which he really possesses. His conversation is simple and modest, and he is averse to all the quackish arts by which other people so frequently thrust themselves into public notice and reputation. For reputation in his profession he is naturally disposed to rely a good deal upon the solidity of his knowledge and abilities; and he does not always think of cultivating the favour of those little clubs and cabals, who, in the superior arts and sciences, so often erect themselves into the supreme judges of merit; and who make it their business to celebrate the talents and virtues of one another, and to decry whatever can come into competition with them. If he ever connects himself with any society of this kind, it is merely in self-defence, not with a view to impose upon the public, but to hinder the public from being imposed upon, to his disadvantage, by the clamours, the whispers, or the intrigues, either of that particular society, or of some others of the same kind.
When I think of countries with an island mentality, not surrounded by water but instead mountains, Switzerland tops the list. How about a U.S. state? South Dakota tops my list in handling the China virus, right up there with Sweden. Going against the grain, being independent is certainly the island way of life.
Let’s drill down to my favored island cities of Key West and Newport, RI. Both have a strong Navy presence and can easily be closed off from intruders. It’s not uncommon to run into Navy Seals/War College Officers getting Cuban coffees at Five Brothers in KW or at Empire Coffee in Newport.
How about certain neighborhoods that act like islands? At the location of our log cabin in Live Free or Die New Hampshire, there’s only one way in and one way out. It’s an island or a moat that certainly makes one think twice about entering when other areas have a more accessible escape route.
Then you have certain neighborhoods or areas on Main Street USA where homes are guarded by American flags proudly hanging out front of one house after another. It’s a feeling of strength and unity that says—move along this is our island.
As Dick Young explains:
Since last spring, my clients and I have been buying Swiss francs and lately Swiss franc denominated, dividend-paying stocks.
What’s behind the dollar’s collapse? Too many dollars relative to Swiss francs are being printed. It’s no more complicated than that.
It is the Fed who is responsible for debasing the currency.
The Fed’s “private club” was introduced by Woodrow Wilson, America’s worst president, in 1913.
Since then, the Fed has increasingly muddled with the economy in total opposition to its original intent.
I have written often that I would return the Fed to its founding principles prior to shuttering it for good.
In the meantime, the dollar will remain on thin ice.
Action Line: Are you living the island life? It’s easier to do than you think. Click here to sign up for my Survive and Thrive newsletter, and we’ll live the island life together.
