I’m a buyer of gold and silver, but I take a different approach than most metals investors.
I don’t predict soaring gold prices - even while I buy more gold and silver every single week.
In fact, while I was acquiring large quantities of precious metals, I wrote a much-ridiculed article expressing caution over gold prices - at the peak of the gold bull market.
While everyone else was drunk on perpetually increasing gold prices, I wrote that gold was ‘expensive’ and would ‘likely’ drop ‘dramatically’ in price. Even more provocatively, I published the article on a popular Austrian economics website, which was rabidly pro-gold.
But I got the last laugh, not because I’m some kind of Nostradamus, but because following cautious, conservative principles works, over time.
Whenever you see someone who makes radical predictions be on the lookout.
Radical predictions are a byproduct of radicalism, and radicalism does not work. Just ask the people who lost their savings with bitcoin, the tech bubble of the late 1990s, real estate in 2007, and pretty much every other bubble in history.
The universe rewards conservatives, both politically and economically.
Conservatism is more than just a partisan buzzword. It’s a strategic philosophy that emphasizes caution, skepticism, realism, and historical patterns. Conservative investors are nearly always going to outperform penny stock investors, bitcoin speculators, and pretty much anyone else who is trying to get rich by gambling on a dramatic prediction.
In 2011, when gold prices peaked, I wrote an article for the Mises Institute of Canada, explaining that gold was expensive and that it was likely that the market would “dramatically overcorrect, meaning gold will essentially become cheap again.”
The price of gold peaked… that week. And it’s been dropping pretty much ever since.
If you look at the comments on the article, you’ll see a collection of people who were confused. They let their oversimplified libertarian radicalism cloud their ability to understand gold - and they believed that the only possible direction for gold prices was up.
That said, I did NOT predict the crash with any kind of time frame. I also didn’t say it was inevitable - just that it was “more likely” that it would “probably dramatically overcorrect.”
The reason I emphasize this is that while I’ve made a lot of money in my life being right about niches and markets, I never assume that something must happen. Predictions are for suckers.
The future is largely unpredictable, at least at any level beyond vague trends. This means that finding opportunity means more than looking for the most obvious play.
Just because we can identify major trends doesn’t mean we can translate that knowledge into actionable specifics. Life isn’t that simple.
As John Maynard Keynes once wrote, “The market can remain irrational longer than you can remain solvent.”
Conservatism isn’t about fearing radicalism. It’s simply recognizing that the universe is a fuzzy, difficult-to-understand place. Good strategy requires a healthy dose of humility and realism.
When it comes to building wealth and taking part in long-term trends, here’s how to do it:
How does gold fit in to this? Gold shouldn’t really be seen as an investment. It should be seen as an insurance policy that, if everything goes well, will lose money over time. It’s like buying a life insurance policy on a family member - you don’t win if you make money. It means something horrific occured. If gold becomes the best asset I own, it means that hell has been unleashed.
Bonus: Follow the clipper-ship strategy. I’ll be writing more about this in the future. It’s one of the most powerful ways to make money in nearly any market. Rather than trying to strike gold during a gold rush, you sell shovels to the miners.
Conservative strategy is good strategy.
When you make the right decisions, you don’t have to look for radical predictions to gamble on - you don't need the gamble at all. Cautious, skeptical, humble strategies always win out over time.
Because I use dollar-cost averaging and have a diversified portfolio and a high rate of savings, I’m unlikely to find myself in the desperate position of being close to retirement age and gambling on penny stocks because I didn’t save enough and am looking for a big payout to make up for lost time.
Legendary corporate strategist Michael Porter wrote: “The essence of strategy is choosing what not to do.”
But how do you make the right choices? Ultimately, it’s all about your mental framework. Making caution an important part of your investing strategy focuses your attention on what not to do.
That makes all the difference.
A fundamental part of a high-school education in America should involve understanding personal finance, the true cost of credit, and how delaying consumption for a few years can be the difference between financial hardship and an early retirement.
I don't mean a class or two of textbook information about how credit works. I mean actually teaching the principles of financial discipline.
We need a producer society focused on creating value - not a consumer society focused on taking as much as possible. Think: thrift and productivity as a culture.
Consumerism has become one of the most destructive quasi-religious elements of modern culture. People identify themselves on the basis of what they consume - not what they do or who they are.
That's why the following should be taught as a comprehensive part of high-school - and heck, college - education. Not just a single class, but as a fundamental approach to finance whenever it comes up, referenced throughout curriculum, branding, and materials.
For example, here are some thoughts that could be developed either through in-depth explanations or specific tutorials and hands-on guidance:
Building a culture of thrift is possible, but it requires focusing on just that - culture. Finance isn't just about math. People have to begin, as early as possible, to understand that not all consumption is "reasonable." We should view consumption with suspicion.
I say this as someone who was a millionaire for years before I bought a new vehicle. I live in a small house that I renovated. My biggest luxury is an occasional $15 cigar. This doesn't mean I don't live well - I live like a king. I just don't mindlessly consume.
The crazy thing is that basic personal finance teaches us to reject consumerism and ironically helps us achieve a much better lifestyle. Rather than spending money on things we don't need, we find freedom - and more money down the road to spend on experiences and a good life.
Good personal finance turns money around so that rather than us being enslaved by the economic system, we're using the economic system to maximize our own options, happiness, and legacy. It's incredibly powerful.
Consumerism is one of the most destructive forces in modern society. It takes potentially free people and enslaves them to empty consumption, constantly increasing their standards for what they believe "normal" people should be able to consume. The end result is an impoverished society... surrounded by material wealth.
Good finance is critical to a good life. That's why so many philosophies - from the book of Proverbs to Stoic thought - emphasize contentment, self-control as something to practice like any other skill, and a lifestyle of discipline.
What better place to develop a strong culture than educational institutions? What use is an educational institution that doesn't educate on the fundamental ideas, concepts, and identities that are key to every other part of society's prosperity?
Imagine every high school student becoming intimately familiar with these concepts. It would transform the world.
Mark Zuckerberg has announced that he wants to shift Facebook away from "passive" content to more active, "engaging" content. In other words, your Facebook newsfeed will soon replace the content that you might merely click on with content that you and your friends are more likely to engage with.
In other words, the pages that post 30 times per day hoping they can monopolize the newsfeeds of their "readers" will be penalized. Facebook traffic is going to shift heavily to brands that are dramatically more engaging.
Of course, this transformation has led to instant backlash from a wide variety of internet publishers -- probably because they don't really understand what Mark was saying, why he said it, or what the consequences of Facebook's easy-to-manipulate passive content ecosystem have been so far.
I founded one of the most popular political websites in the world. It began with an important mission: speaking truth to power by giving a voice to the forgotten middle class.
In the past, I wrote headlines for articles that reached over 15,000,000 users on Facebook. From a single posting. On a single page.
I've written articles that have been read by millions and millions of people from Facebook. No, I don't mean "seen" by millions of people. I mean millions of people clicked on the actual link and read the message crafted to influence their political interpretation of the world.
My site's style focused on the sizzling elements of stories that the Wall Street Journal and even Fox News didn’t want to cover. It was a perfect marriage with Facebook's algorithm because it ignored branding and focused on whether users would click on stories.
It was good storytelling. It was fun. And it worked frighteningly well.
Realistically, my personal headlines and articles had drastically more reach than the entire "Russian interference" scandal covered by mainstream outlets like the New York Times. So when it comes to the algorithm change and the implications, I'm speaking from the position of someone who has utilized this algorithm more than almost anyone on earth.
Still, the ecosystem that allowed what I was able to do is now mostly gone - and that's a good thing.
Visionless people look for consistency regardless of context. Some want the ecosystem that existed 4-5 years ago to be all that exists going forward. That's disturbingly short-sighted.
In the past, alternative media needed a huge boost to shake up the narrative. Now we're in a weird place where those same alternative media brands acquired too much power, and we need to change things again.
I now run the Conservative Institute, a very different project. It seeks to provide reliable, trustworthy news for conservatives in an era where dishonesty has become a fundamental pillar of the right-wing media ecosystem. The goal of CI content is not to "go viral" - it's to simply tell the truth. Accuracy is the primary goal, come what may.
We don't defend Trump when he's wrong. We don't attack liberals when they're right. We only report what we believe to be important stories that should circulate on the right wing - and everywhere. A typical article will link to sources like the New York Times, federal agencies, and PDFs of actual studies.
Now, Facebook seems to be responding to the same basic issues that CI was built to combat: a social media ecosystem that replaced high-quality, investigative journalism with shallow "passive" content mostly ripped quickly from other - often just as shallow - sources.
To better understand what's happening, let's look at the following basic concepts that provide context for the Facebook change.
Never in the history of the world was it so easy to reach so many people with a message.
I know people who had no experience in marketing, journalism, research, or much of anything else, reach thousands of people with low-quality stories mostly lifted from other sources.
In fact, ripping off my projects was a pretty easy way for someone with no talent or instincts to make a healthy six-figure income. It happened frequently.
That entire system was incredibly powerful for shaking things up. Now, we're in a different situation - the balance has shifted from the Associated Press, NBC, and local newspapers to an army of smaller sites that often spread misinformation, nasty accusations, or outright lies. Another way to describe it? Fake news.
The algorithms that decided how many people would see content didn't account for "accuracy" at all. Who cares if a fake story goes viral? It was getting the clicks and shares it needed to get more and more traffic on Facebook. That's a massive design flaw, especially when alternative media became so powerful.
This was a temporary hiccup in world history. "Alternative" and "mainstream" media aren't the future - quality media is, regardless of where on the political spectrum it may fall.
Everyone has an ignorant family member known for accidentally sharing fake news stories they didn't verify. The idea that a global media distribution system should give that person just as much power as someone who isn't as gullible is absurd.
I don't mean this in a condescending manner at all. I'm ignorant of many things just like you are. But many people simply don't have the time or expertise in media and geopolitics to know what source should be considered "trustworthy" and what source is taking them for a ride.
If anything, this system isn’t even fair to the person falling for the fake news - the distribution system should minimize the lies that show up in that person's newsfeed as well.
Some will huff and puff over what I just said, pretending they deeply care about ignorant people having the right to easy access to fake and misleading news. The problem is that this is mostly bad-faith virtue signaling.
Let me be blunt: passive-content farms/publishers don't respect their audiences. They often laugh at them. It’s easy to get rich off of people who don’t know any better.
Those market incentives are largely gone, and that's a wonderful thing.
"Passive" content is content that requires no investment from the reader. You don't have to have any kind of relationship with the brand or the content. It's content that happens to be in your feed, and you just may find it interesting enough to click on and read without comment - or not. Most of the content in your newsfeed is like this.
You probably have no emotional connection to the brand and if you click on the story, you may skim it or watch some video, and then exit out and never think about it again. No comments, no shares, no personal connection - nothing. It's passive content.
"Passive content" is where fake news comes from. It's the ecosystem that allows fake news to flourish. It's the system built on a series of economic incentives that allow bad faith publishers to make money manipulating you for fun and profit.
There are a few brands that manage to engage me with almost all of their content; Tim Ferris, Ryan Holiday, Bloomberg, The Art of Manliness, etc. I engage with their community, share their links to my personal page, and have a connection to the brands themselves. They don't just happen to show up on my feed and trick me into clicking.
I have a deep appreciation of the personalities behind the content. That's vital. That's good. And that's the future.
If your business model is based on easy traffic from one website, that's your problem, not Facebook's problem.
As the founder of Axios said to the Wall Street Journal:
"Facebook is a public company that controls its own decisions... Publishers should do the same damn thing."
This isn't new. Copyblogger, (a resource any content marketer should see as kind of like a regularly updated Bible), wrote years ago:
"If you're relying on Facebook or Google to bring in all of your new customers, you're sharecropping. You’re hoping the landlord will continue to like you and support your business, but the fact is, the landlord has no idea who you are and doesn’t actually care."
The future will still have plenty of content. The future will still have plenty of news. But it won't be low-quality content lifted from other sources without any attempt at providing extra value like additional context, additional sources, or additional facts.
The future belongs to quality publishers with strong brands and vibrant communities. This is the way it's been for centuries - and this is the way it will continue to be for centuries more.
If Facebook's change is going to harm your business, then discover higher-quality, more long-term oriented workarounds. Build an online "TV" show. Launch a podcast. Write a book. Go to other platforms. But don't blame Facebook for not allowing you cheap access to a gravy train.
The Clipper Ship Strategy: to make money during a gold rush, focus on supplying a secondary demand created by a primary boom. Chances are, it'll have drastically less competition while being just as lucrative.
Cryptocurrencies have a similar situation unfolding. Everyone is trying to get rich buying the 'coins' in order to sell them to someone else later. This is extremely risky, and just as many people will get wiped out as will make money. It's one thing to buy bitcoins if you're worried about a paradigm shift (like I described in my 2013 article on Seeking Alpha). But it's another thing to buy Bitcoins hoping it's your personal gold rush.
Trying to strike gold - or its digital equivalence - is for suckers or extremely skilled speculators. Chances are, you're not one of the latter.
Here's the real way people are making money with cryptos:
Either way, whenever you see a gold rush, don't fall for the trap. Don't go for the bait. Don't become a miner. Find a way to build wealth by looking for the second opportunity - it's probably being overlooked by others and there's more room to grow and profit.
