Chains of habit are too light to be felt until they are too heavy to be broken. In the investment world, the rearview mirror is always clearer than the windshield. I have to begin to reassess whether my favorite holding period should still be forever. Maybe my investment relationships should no longer last a lifetime.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

My stock selection has been poor and I have been too concentrated. I, too, have been exposed as swimming naked when the market tide went out over the last six months. I failed to properly analyze the risks of a number of my investment purchases. This is particularly true in my large involvement in financial stocks, as the moats I envisioned that protected their business franchises have flooded, reflecting the commoditization of financial products. Equally important, I materially miscalculated and overestimated the values of my financial holdings' assets, including American Express (AXP), Wells Fargo (WFC) and U.S. Bancorp (USB), to name a few. To borrow from Gertrude Stein, "There was little there, there." Stated simply, in my investments, I thought that I had found one-foot bars that I could step over, but they turned out to be ten-foot bars that I couldn't leap over!

Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

I should have been more risk-averse. The depth of the world's economic problems suggests that deflationary forces will be with us for some time to come. Inflation has been delayed.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: "I skate to where the puck is going to be, not to where it has been."

Perhaps in recent years I enjoyed the investment process more than the proceeds and rewards. Maybe I should not have made some of these decisions on my own. Maybe I should have sought advice from industry specialists or from analysts who had expressed concerns that the foundations of our credit markets, our economy and the world's stock markets were increasingly on shaky ground.

I don't like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I'll follow the lead of a restaurant that opened in an empty bank building and then advertised: "Put your mouth where your money was." Today my money and my mouth both say equities.

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