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Private Business

An experiment of InternetU.org's Business School

thanks to:

Current Investment Stategy

Our general philosophy remains the same; however, the short term outlook requires special readiness. After having accumulated stocks over the last 20 years, participants in this experiment began re-aligning their portfolios between August of 1998 and August of 1999.

Over the period, the average yield on the stock portfolios was in excess of 70%. For this, we are grateful. Unfortunately, our confidence in such extraordinary gains faded.

By August 16, 1999 we had liquidated 75% of our equity positions and hedged another 15%. (That means we sold options that are called coverd calls. Selling these options helps to protect our wealth.) We anticipate less than 10% of our diversified investment portfolio will be in the stock market by years' end... and, perhaps as little as 2%.

Our largest position will likely remain in real estate. But, most of our semi-liquid assets (like stocks) will be converted to liquid assets. Some of the proceeds from the sale of the stocks will also be used to purchase other real assets, such as, gold, treasury issues and commodities.

If you would like to learn more about these ideas, please stay tuned.

Please click here to learn some of the theory behind what we do.

Class Project:
What would happen if any of the following were to occur?

• Alan Greenspan resigns
• The Panama canal were to come largely under China's control
• The Sun's 11 year "EM cycle" peaks
• Any of the following global tensions ignite:
  • India vs. Pakistan
  • China vs. USA
  • Iraq vs. USA
  • Yugoslavia vs. USA
  • Russia vs. World
  • China vs. Taiwan
  • Israel vs. Middle East
  • Africa vs. Africa
  • USA vs. Terrorists
• The stock market justifies itself with historical averages
• Y2K computer failures result in any of the following:
  • A disruption in financial markets
  • Electric power failures
  • Telecommunications failures
  • Railway and transportation disruptions
• The advent of the new millenium activates the radical religious groups, governments and organized crime families
• The U.S. government turns their role as "the World's Policeman" onto their own citizens
• The Microsoft monopoly is disrupted
• The U.S. President and other world leaders are replaced
• Increased meteor activity interferes with telecommunications
• Global warming and natural disasters put a strain on our infrastructure
• The public panics over any of the above issues

EXTRA CREDIT
If more more than one of these events happened at the same time, what might the chaotic system look like?

More Things To Think About

Case Study: Boston CHICKEN (Who is Watching Over Our Retirement Accounts?)

Case Study: Examining the Costs and Benefits of a Microsoft Monopoly

Electric Utility Outlook for the Northeastern USA

Y2K Myths

A Hedged Contrarian Position

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