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August 2012 Blogs
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The idea behind an old-fashioned duel was that two participants wielding loaded firearms, faced back-to-back, each took ten paces in opposing directions then whipped around and hoped their opponent’s gun would jam. This has to be one of the dumbest exercises we’ve come up with as a species, but it is how many an argument got settled in the good ole days. And by “settled” I mean at least one of the two people got killed. The point, though, is that a duel marked the end of the argument.

Does it sometimes feel like the anecdote above describes our view towards the current economic problems we face (the looming “fiscal cliff,” our ever-compounding national debt, the record levels of cash earning zero interest held by US corporations, consumers just dipping their toes back into the consumption pool, and on and on)? Nobody wants to take that tenth step until someone can guarantee their gun will fire like it always has. But it’s becoming a self-fulfilling prophecy, isn’t it? The more hesitant everyone is to pull the trigger, the more likely our respective guns won’t have the necessary firepower to settle the argument when the time comes.

Is there some reason this can’t be a coordinated effort? Why do we think someone must be the loser every time there is a decision to be made? Will it be the taxpayers? Or the Germans? Or the banks? Whoever it is, it won’t be me! Not this time!!

As I pointed out last month — we are within spitting distance of all-time highs on the Dow and the S&P500. But why doesn’t it feel like it?? We don’t trust it. If the market rallies but there’s nobody invested to benefit, did it really rally?

We are “playing not to lose,” rather than “playing to win.” There is a sense of confidence that is currently missing in our country, if not our world. How often do you hear someone say “I’m waiting to see what happens with [insert one of the following: Europe, our election, the stock market, gas prices, the drought, the new iProduct]“ before making a big decision….?

I’d like to suggest that there doesn’t have to be a loser here — we will all lose, however, if we don’t start working together. We all want Europe to survive; we all want our debt and deficit eliminated; we all want our companies to start investing/hiring again. This doesn’t have to be a lose/lose stand-off. Nobody wants that. And why should we continually wait until we’re on the precipice?

I for one think, structurally, things are a great deal better than they feel. And I think it’s possible for everyone to win. When the first incremental ‘unit’ of trust returns to the market, the domino effect upwards could be dramatic. And it may have already started…

Adam B. Scott
Argyle Capital Partners, LLC

www.argylecapitalpartners.com
10100 Santa Monica Blvd, #300
Los Angeles, CA 90067
310.772.2201 (Main)
310.496.2822 (Fax)

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