by Gary Alexander

July 20, 2021

As you read this, I’m at the Seattle airport flying toward South Dakota for the Freedom Fest, where I will take part in four panels in the first two days, then prepare two speeches for the final day. One will be on my hobby interest – music history – specifically, the centennial of “The Jazz Age” of the 1920s.

An hour before that talk, I will discuss something more relevant to Growth Mail. I’ll be part of a 3-person panel, “Finding Financial Freedom: Our Top 7 Tips to Build a Lifetime of Wealth.” It will be hard to compress life’s lessons into my 15-minute time slot, but I’ll use that title as an excuse to pen this two-part memoir of my investment writing career. As you’ll see, I learned a lot of valuable lessons early, but at the same time I was “too soon old, too late smart,” as the saying goes. You’ll see what I mean soon enough.

Lesson #1 (from the 1960s) Seek Lifelong Education (from Wise Mavericks). Just like Louis Navellier questioned the reigning orthodoxy of his day – about “efficient markets” and index funds – I questioned the reigning wisdom of the 1960s about King Dollar, the Nifty 50 stocks and bonds, and passbook savings accounts for retirement. In college (1963-67), I studied all the financial theories I could find, then after college I took a job as resource director in a News Bureau. With other peoples’ money, I subscribed to the best independent newsletters I could find and read the best business books, taking some graduate courses under the best business minds I was reading, like Peter Drucker at the nearby Claremont Graduate School.

At the same time, my father (a Boeing engineer in Seattle) was part of a maverick investment club led by a “gold bug” who provided the initial mailing list for Jim Blanchard’s “Gold Newsletter” (launched in 1971, which I went on to edit in the 1980s). Dad would send me oily xeroxed copies of newsletters by Harry D. Schultz, C. Vernon Myers, and others. I also bought Harry Browne’s book “How You Can Profit from the Coming Devaluation.” These sources soon convinced me that the dollar was doomed.

Influential Books Images

Lesson #2 (1970s): Be a Contrarian Investor: By 1970, all my studies with these alternative investment books and newsletters had me convinced that the mainstream investments of the past would not work in the 1970s. We had to flip the script and not go with the flow. In a December 1970 article, I made the case for a coming Depression and in 1971, I wrote an extensive article on the coming Dollar Crisis, inspired by Harry Browne’s book. That came true fairly soon, as President Nixon devalued the dollar in August 1971.

United States Dollar Value Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

The 1970s became a decade of combined inflation and stagnation, creating a new term, “stagflation.” The standard investments (stocks, bonds, and dollars in the bank) didn’t work. “Regulation Q” limited bank interest to 5.25% when inflation was twice that, or more. First, tech stocks crashed in the spring of 1970, then the “Nifty 50” collapsed in 1973-74. Gold was soaring, but it was illegal for Americans to own it in most forms. Gold stocks, some foreign gold coins, and silver were legal, as were Swiss francs, and real estate. These were the big winners my sources were writing about – the “real” assets. In the 1970s, only those who went against the historical grain of traditional paper money assets made any real money.

Lesson #3 (the 1980s): Invest in Yourself. In the 1970s, it didn’t do me much good to be “right” about the trends because I didn’t have much money to invest. To make any significant money, you need excess funds above living expenses to invest. You can do that as an employee if you rise in the corporate ladder and create a valuable division that is its own profit center, but the best proven path to the greatest wealth and security is to invest in yourself. In my case, that was to be a free-lance writer in the financial field, specifically, explaining the “alternative investing” arena to well-off investors in need of diversification.

To back up a little, I knew that if I wanted to become a writer, I needed to write for people who have lots of money and who have a specific need for a writer’s help. People with money are often called investors. To my mind, the greatest unfulfilled need of the investment advisor community was the ability to write in a language the general public could follow, along with motivation to get the reader to act on that advice.

My first opportunity came just after college graduation in 1967, when my supervisor returned from a trip to Japan and wanted to write an article about the emergence of Japan as an economic giant. Seizing that Main Chance, I said, “Let’s turn that into a three-part series. You tell me what you saw. I’ll do all the research and write the first drafts and you fill in the rest and get the lead by-line.” Sure enough, it became a three-part series in a national magazine and my career of writing about global finances began, at age 22.

Your business idea is likely very different from mine, but the key is that you need to make a lot of money to be able to invest a lot of money, and the best way to earn surplus funds is to control your own business.

Lesson #4 (the 1990s): Learn from History to Be an Optimist. This lesson is the central core of my investment success – my single most important lesson of all. It struck me like a Force 5 Hurricane in 1990 that I had not profited from the 1980s because I still believed in the world of the 1970s – gold over stocks, a collapsing dollar, and a coming crash! I needed to learn from history and adapt to these changing times.

Cumulative Returns on World Equity Index Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

My first hint came at the 1981 New Orleans investment conference, when Harry Browne said that gold had “had its day,” so his breakout session was empty, while across the hall those who predicted $3,000 gold had a turn-away crowd of fanatical followers. But times had changed. Harry Browne was right. It was “Morning in America” under Reagan. The dollar recovered, gold retreated, and stocks were soaring.

The capper came as I moderated a “bull vs. bear” debate in October 1990 at the New Orleans conference. In the audience were 500 bears and two bulls at the very time we should buy stocks, at Dow 2400, the low point of the 1990s. The Berlin Wall had crumbled. and the deadly Soviet empire was about to expire.

From my 1967 graduation to late 1990, I was looking for the bad news that would send stocks down and gold up, but that no longer reflected global realities. It was time for me to wise up and turn positive.

Normally, I begin talks about this transition by saying: “Hi, I’m Gary. I’m a recovering Apocaholic.”

In the 1990s, I finally wised up and started accumulating stocks – and a positive net worth. (I’ll continue this next week, but I can tell you now that one lesson is, “Don’t try to time the market,” so don’t sell now.)

All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.

Please see important disclosures below.

Also In This Issue

A Look Ahead by Louis Navellier
Inflation is Rising at the Fastest Pace in 30 Years

Income Mail by Bryan Perry
When Money Runs for Safety

Growth Mail by Gary Alexander
Seven Life Lessons for Building Wealth (Part 1 of 2)

Global Mail by Ivan Martchev
Nasdaq Looks Ready to Consolidate Its Gains

Sector Spotlight by Jason Bodner
The Big Money is Selling as the “Dog Days” Begin

View Full Archive
Read Past Issues Here

About The Author

Gary Alexander
SENIOR EDITOR

Gary Alexander has been Senior Writer at Navellier since 2009.  He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks.  For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.

Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s.  He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division.  Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander

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