Orwell makes a wonderful point in this old essay: if the dominant technology is complicated and expensive, the despots and tyrants have the upper hand. If the dominant technology is widely understood and cheap, the rest of us do.
Orwell saw this in terms of weapons, but I think that’s incorrect: his worldview is one of strong offensive technology with little regard to defense (except as a footnote). In my eyes, seeing the balance as defined by attack (and force) defines conflict in terms of pain and suffering (specifically, how much you can cause the other guy).
That being something to avoid rather than standardize, I think it’s better to find a touchstone with nicer connotations.
The markets have been doing great things with no clear reason. A conspiracy minded person might view this as the 1% giving themselves a chance to sell while things are high. Indeed, it would seem that’s exactly what they’re doing:
“Corporate executives are taking advantage of near-record U.S. stock prices by selling shares in their companies at the fastest pace in two years.” (http://www.bloomberg.com/news/2013-02-21/insider-sales-reach-2-year-high-as-s-p-500-nears-record.html)
This seems like an excellent example to follow. “the best time to sell is when prices are high.”
While our anonymous betting-on-zombies millionaire from Saturday (http://www.businessinsider.com/art-cashin-on-big-vix-bet-2013-2) hasn’t seen his bet pay off just yet, the Volatility Index is indeed heading in that territory at an alarming and ahead-of-schedule pace (http://finance.yahoo.com/q/bc?s=^VIX&t=1m&l=on&z=l&q=l&c=).
This is slightly less relevant if (like me) your net value is not held in “securities.” It is still relevant due to what it reflects about the financial system and therefore the value of the pieces of paper in your wallet.
Remember, those only have value because central banks say they do, and said banks are currently doing a tightrope walk over a very, very, very deep gorge in the middle of a hurricane on a wire that may only go halfway across.
This is a lesson people over here know all too well, having seen the currency in their wallet become worthless either three or four times over the past century. (Papiermark, Reichsmark, [Ostmark], Deutsche Mark –> Euro)
Therefore, all this eschatology begs the question, “sell — and buy what?”
Taking a page from Maslow, a proposed hierarchy of hedges:
– Productive property: farms, rentable real estate in a good location (I really, really wish I had the money to buy a building in Berlin)
– Physical metals: The advent of gold-mining bacteria and the rate at which technological development suggests “3d printing” any material you like will become a reality suggest these won’t last long-term, but they ought to stay good for a few years
– Solidly profitable businesses of the sort you understand
– Anything that creates value in a well established way
Not on the list but worth mentioning is Bitcoin, which I only kind-of understand. In my history of making obscenely profitable investment decisions that bring in comparatively little actual money, it has the ignominious honor of being both the best and worst one ever: having bought 25 CAD worth at 1 CAD = 1 BTC, and then recently pulled up the wallet.dat that I /thought/ had those Bitcoins only to find it listed a balance of 0 with no transactions ever.
“ages in which the dominant weapon is expensive or difficult to make will tend to be ages of despotism, whereas when the dominant weapon is cheap and simple, the common people have a chance. Thus, for example, tanks, battleships and bombing planes are inherently tyrannical weapons, while rifles, muskets, long-bows and hand-grenades are inherently democratic weapons. A complex weapon makes the strong stronger, while a simple weapon so long as there is no answer to it gives claws to the weak.”