What is the number #1 rule for making money? Plus a few other questions and answers

August 28, 2024 

What is the number #1 rule for making money?

Buy low, sell high. Warren Buffett says that the first rule to making money is not losing money. However, you have to have money before you can lose it. To make money, you have to acquire or develop something of value and sell it for money. You have to buy it a lower price than you sell it. 

Speaking of buying and selling, note that Warren Buffett's Berkshire Hathaway is mostly selling stocks nowadays. The Oracle of Omaha knows a few things about investing and making money. Warren is turning 94 this Friday. The guy is as wise as a human investor can be. Warren Buffett believes that the stock market is mostly overpriced. Warren is selling now, and accumulating / hoarding cash reserves that he can deploy once values return to the market. And they will return sooner or later. 

Warren Buffett should have followed our advice three weeks or so ago when we recommended that Berkshire Hathaway bought Nike shares. Nike shares were trading at 60% below their peak value. Since our recommendation, Nike shares have gained about 15%. Nike shares had a bad day today, losing 3%, but are still up since our recommendation. Nike is not going anywhere, and it may be one of the few values out there. We are not buying Nike shares at the current price, but if they go down to about $75 again, we will certainly buy more again. They closed at $82.79 today. We'll see what happens. 

Why are NVIDIA shares going down despite having had superb earnings that beat expectations?

 Smart investors know that nothing lasts forever. Everything that goes up, eventually comes down. The fastest it goes up, the fastest it comes down. NVIDIA is making a killing selling its GPUs that are replacing CPUs in all major database servers. The "problem" (opportunity) is that everyone and their mothers are now developing NVIDIA-like GPUs. Sooner or later competition will catch up with NVIDIA. NVIDIA was lucky because it was already developing GPUs when smart programmers figured out how to leverage GPU technology for machine learning applications that depend on parallel processing. 

The GPU genie is out of the bottle. GPUs will become the new normal. In less than a year, no one will be impressed with chatbots or AI applications. They will be the norm everywhere. There will be more GPUs flying around than people wanting to buy them. Due to the law of supply and demand, prices will begin to come down. NVIDIA's bubble will finally deflate for good. NVIDIA will settle at about a $1.75 trillion valuation after the dust settles. That would represent about a 40% decline from today's prices. Mark our words. Hold us accountable in the Summer of 2025.

Break Break - Politics now.

What would be the worst case scenario if Trump wins the elections?

The sky will not fall if Trump wins the elections. The worst case scenario would be that Trump manages somehow to become an autocratic dictator. This would not be the end of the world. but would begin a perilous chapter in U.S. history. 

A dictatorship, however, is not the end of the world or the end of the country. Russia and China are two dictatorships and are still alive and kicking as countries. Of course, the inhabitants do not enjoy the freedoms of democracy and liberalism, but those who adapt to the regime can live relatively "normal" lives. Those who oppose the regimes, pay a heavy price, usually losing their freedom or their life. 

There are multiple countries in the world considered to be under dictatorial or authoritarian regimes. These regimes vary in their degrees of repression, control, and governance structures, but they typically lack democratic institutions, suppress political opposition, and limit freedoms. The Middle East, Asia, and Africa have the most. Some dictatorships are "less bad" than others.  

Middle East

1. Turkey - President Recep Tayyip Erdoğan (considered increasingly authoritarian)
2. United Arab Emirates - Federal Supreme Council, led by hereditary rulers
3. Oman - Sultan Haitham bin Tariq
4. Qatar - Emir Sheikh Tamim bin Hamad Al Thani
5. Iraq- President Abdul Latif Rashi
6. Syria - President Bashar al-Asad
7. Saudi Arabia - Crown Prince and Prime Minister Mohammed bin Salman
8. Jordan - King Abdullah II bin Hussein.
9. Bahrain - King Hamad Bin Isa Al Khalifa

Asia

1. North Korea - Supreme Leader Kim Jong-un
2. China - President Xi Jinping
3. Syria - President Bashar al-Assad
4. Iran - Supreme Leader Ali Khamenei
5. Saudi Arabia - King Salman bin Abdulaziz Al Saud (with Crown Prince Mohammed bin Salman exercising significant power)
6. Myanmar - Military junta led by Min Aung Hlaing
7. Turkmenistan - President Serdar Berdimuhamedow
8. Tajikistan - President Emomali Rahmon
9. Uzbekistan - President Shavkat Mirziyoyev
10. Laos - President Thongloun Sisoulith

Africa

1. Eritrea - President Isaias Afwerki
2. Equatorial Guinea - President Teodoro Obiang Nguema Mbasogo
3. Chad - Transitional Military Council led by Mahamat Déby Itno
4. Zimbabwe - President Emmerson Mnangagwa
5. Sudan - Military leadership following the 2021 coup
6. Burundi - President Évariste Ndayishimiye
7. Rwanda - President Paul Kagame

Americas

1. Venezuela - President Nicolás Maduro
2. Cuba - President Miguel Díaz-Canel
3. Nicaragua - President Daniel Ortega

Central Asia and the Caucasus

1. Kazakhstan - President Kassym-Jomart Tokayev (with significant influence from former President Nursultan Nazarbayev)
2. Azerbaijan - President Ilham Aliyev

Europe

1. Belarus - President Alexander Lukashenko
2. Russia - President Vladimir Putin

Some countries may have mixed forms of governance, where certain elements are democratic, but the overall system remains authoritarian or an hereditary monarchy. Additionally, some countries listed above may have regimes that are officially elected but are considered undemocratic due to electoral manipulation, lack of political freedoms, or other factors.

Would Trump be a bad dictator?

Of course. Trump would be a terrible dictator. Trump is a first generation American of German descent with a strong fascination with absolute Hitler-like, Putin-like racist power. Besides, all dictators are terrible by definition without exception. The only silver lining would be that Trump is an almost senile senior (ASS) way past his prime. Since Trump is already 78 years old, he would not have too much time as a dictator. Although time is relative. What if Trump gets to be as old as Warren Buffett who turns 94 this Friday? That would be a disaster for our country with Trump as a dictator for 15 years or so. 

Luckily, nature is a killer and Trump will be dead relatively soon. There are at least 50% chances that Trump will die within the next 10 years, before reaching 90; and there are at least 95% chances that Trump will die before reaching 100. Besides the perils of Trump as a dictator, the biggest problem may what happens to the Nation after Trump passes away. Usually, those who come after the first dictator are even worse for the country than the initial ones. 

If you despise the possibility of Trump becoming an autocratic dictator, don't take any chances. Vote for the Harris-Walz ticket this coming November. It is the apathy of Trump what makes us fully endorse Harris. Vote for Harris-Walz, a better country for all. 

Do Republicans regret having nominated Trump? 

Some do, but the vast majority of Republicans happily support Trump. For sure, Republicans would have fared better if they had nominated Nikki Haley instead of Trump. Haley would have defeated Biden who would still be running for re-election with half brain dynamics. Republicans would have made history with the first woman president of the United States. The Haley ticket would have popular among women, would have kept anti-Trump Republicans voting Republican, would have been super appealing to most independent voters, and would have convinced many Democrats to lend a vote to Republicans rather than to re-elect the almost senile senior (ASS) Biden. Again, Biden would not have stepped down if Republicans would have nominated Nikki Haley. Unfortunately for Republicans, Trump owns the racist party.  

Does Trump regret choosing JD Vance as his running mate?

Not at all. Trump is happy with Li'l Hillbilly Trump. We think Trump should have nominated Ivanka Trump for the Vice Presidency. That was our recommendation. It would have been hilarious at first and brilliant later. It would have generated so much attention for Trump. It would have worked out better than JD Vance for sure to attract new women voters. 

Hillbilly JD Vance, alias Li'l Trump, is not adding any voters to the Trump ticket. JD Vance is actually subtracting voters. Not a single prospective Trump voter can be attributed to JD Vance. Some voters, especially women voters are moving away from the sexist Trump-Vance team, opting for the historic Harris-Walz team. JD Vance is a net negative for Trump and racist Republican party that Trump keeps destroying every day. Trump has this unique touch, Trump's Touch, by which everything, absolutely everything, that Trump touches turns into shit, fraud, or both. 

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