Britannia Radio

The Rich Are Investing…Should You? By Christopher Ruddy The difference between the rich and the average investor often comes down to timing. Knowing when to invest and when to pull out of the market is key. I was recently reading a book about Andrew Carnegie, the richest man in America in the late 1800s. The book was “Meet You in Hell: Andrew Carnegie, Henry Clay Frick, and the Bitter Partnership that Transformed America.” Carnegie’s rags-to-riches rise was remarkable. Today we remember Carnegie as a great steel magnate and philanthropist. But his early fortune was made in railroads and, according to biographer Les Standiford, during the country’s first Great Depression. The year was 1873 and a financial panic swept through Europe. By September of that same year, the U.S. markets were hit, and railroads, then the boom investment of the time, were struck. Railroad companies had overleveraged and were decimated as credit lines evaporated. Substitute “housing” for “railroad” and we might see parallels between then and now. But while others acted in fear, Carnegie was bold. He had not over-leveraged his own railroad properties. “For Carnegie, it was another invaluable business lesson; the best time to expand was when no one else dared to take the risks,” Standiford wrote. Carnegie knew railroads would continue to prosper and were, at the time, the best form of overland transportation. The depression had lowered costs. Now was the time to strike and invest. His decisions in those bleak depression years would lay the groundwork for his later stake in U.S. Steel. Today, investors are wise to remember Carnegie’s advice. His advice does not mean that one should invest in any vehicle just because the price is low. But rather, to look for investments that will certainly rise as the economy turns around. Surely, Warren Buffett is following the same path by purchasing companies when nobody else wants them. As he so famously stated, “We attempt to be greedy when others are fearful, and fearful when others are greedy.” Savvy investors buy while the masses retreat to the sidelines. Like Carnegie and Buffett, we at Moneynews and Newsmax believe the best time to invest is in a depressed market. We also believe the best way to invest is privately. Why? Because studies show that private investments perform better than public investments. To open up our readers to these private investing opportunities, Newsmax and Moneynews have launched the “Private Opportunities Club” — a no-fee membership organization that provides Accredited Investors with a newsletter and other forums to find out how high net worth investors can find maximum returns in private investments. An Accredited Investor is typically defined as a person with a net worth of more than $1 million or an annual income greater than $200,000.