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TWST: Please start with an overview of Manarin Investment Counsel.
Mr. Manarin: We are an independent firm that manages about $500 million for
individual investors and small businesses. Our investment philosophy is simple.
We believe the safest way for investors to build or maintain wealth is to be an
owner, not a lender, with their capital. Historically, the highest returning
asset category in the world is common stock, so the bulk of the assets we manage
are diversified across the global equity market. We manage two private funds and
one public fund, the Lifetime Achievement Fund. To build our portfolio, we seek
out the very best equity money managers we can find and invest in the mutual
funds they manage, thus resulting in a globally diversified fund of funds.
For real world safety I hedge our portfolio with gold mining shares to protect
against inflation, the risk of a monetary collapse and international
instability. In 1978, I had about 7% of the portfolio in gold mining shares but
later went to 20% because of Jimmy Carter's disastrous policies. With Ronald
Reagan's economics, I dropped it to 5%. In the mid-1990s, due to increases in
derivative trading, I brought it back to 7% and that's where I am now. I've been
telling investors for 30 years that I hope we don't make any money with our gold
shares. It's not there to make money for us; it's there to protect us. TWST: What are your views on the way that the economy and the stock market have
tumbled since the events of last summer?
Mr. Manarin: About three or four months ago, I wrote an article titled "The
Self-fulfilling Prophecy" and I said that at the rate the media is screaming
recession it seems to be a unified force out there spreading doom and gloom and
there was going to be a reaction by the crowd. Visualize millions of businesses
and investors thinking, "Oh no, recession! Maybe I better not do this!" and sure
enough you have a self-fulfilling prophecy.
Then you have the market fearing the potential policies of a Hill-Obama
presidency which would be disastrous for investors out there. If either one
wins, that would be negative and would add to the self-fulfilling prophecy of a
weak economy. In my opinion, Congress is doing the best job they possibly can to
destroy a prosperous economy with their tax and spend idiocy. So there you have
it, that combination has caused the market to already discount the worst
possible scenario. The market has now declined about 20%, so what's next? Unlike
what you hear everywhere else, I'm seeing a strong bull market on the horizon so
long as fiscal and monetary policies remain beneficial for the market.
Now the question is how soon? It doesn't matter. If you invest today in this
negative environment, within a year or two you will likely have earned some
handsome profits.
Tickers included in this excerpt:
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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