What Do Billionaires Know About Investing That You Don’t?

Billionaires are good at seeing financial trends early, investing before the opportunity is obvious to everyone, and realizing that wealth moves in cycles. warren-buffett

They search for the truth – what’s really going on – and they don’t take the media’s word for it. They know the media is tied to advertisers that pay the bills. They don’t want to upset their advertisers, so they keep their reporting safe and banal.

Billionaires don’t take the news at face value. They dig for research, ask questions, and find out what’s happening underneath the obvious current above. Often they have an edge that you don’t and have access to people in high places. They have connections.

They also know wealth moves in cycles, just like the seasons. What was a “hot” investment in the last cycle isn’t what’s “hot” in the next cycle. A lot of people get stuck buying what was “hot” in the last cycle, thinking it will come back.

Have internet stocks or large company growth stocks or Microsoft made a new high since 2000? No, in fact Microsoft, while a good company, is still 50% below where it was in 2000 at the peak of the bubble. Some investors have owned it since 2000 and have earned ZERO return on that money in 11 years!

Will real estate be like that and not see a new high in a decade? Silver’s just hitting it’s 30 year high – it’s been dead money for 30 years, but now it’s coming back again.

Billionaires like Paul Tudor Jones, John Paulson, Jim Rogers, the Basses, and George Soros are betting the dollar decline is a long-term trend that will continue. The dollar is already 47% lower (compared to other currencies) this decade which means our purchasing power has dropped by 47% in 10 years. No wonder people feel poorer!

On top of that, the dollar hit a low in 1933 and 1973. Could it be in another 40 year cycle and hit a low in 2013?

Paper money is only worth something if the supply is under control. Guess what, ours isn’t.

The dollar has lost more than 7% year-to-date. That means your savings, cash, and CD’s have lost 7% of value this year. Do nothing, and your money will continue to lose value.

The selloff has been so sharp, I’m expecting the dollar to rebound for a while before it returns to it’s downtrend. Commodities – agriculture, precious metals, energy – will be the long-term trends for wealth building in this cycle. Wait for the right opportunity to buy commodities on weakness…it’s coming.

The good news is (at least from an investment perspective), while the dollar is losing, commodities are gaining. The soaring prices you have heard about in commodities like gold, silver, cocoa, coffee, and cotton is because the dollar has been falling. If you know what to buy to position yourself in the right investments, rather than losing purchasing power, you will set yourself up to gain tremendous wealth – just like the billionaires are expecting to gain their next billion.

Disclosure: I own commodities, gold, and silver stocks.

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