Investing $1,000 in Lehman Bros, AIG -- and Beer

Realtor "Water Cooler" Talk

The water cooler is long gone, of course.

Instead, we Realtors have meetings.

Lots and lots of meetings.

I picked up this nugget -- plus some good market info -- at Edina Realty's Exceptional Properties meeting this morning (anecdote courtesy of downtown Manager Matt Loskota):

"If you invested $1,000 three years ago in AIG, what would you have today?"

"$30."

"If you put that same $1,000 into Lehman Bros. stock, what would it be?"

"$0."

"Now, how much would you have if spent the $1,000 on beer?"

"$235 . . . If you'd kept the aluminum cans."

Disproves (sort of) that line about "you don't buy beer, you rent it."

Profiting from Bubbles: 'Grab Marshmallows'

What's an Investor to Do?

[But] as long as the music is playing, you've got to get up and dance.

--Former Citigroup CEO Chuck Prince

Perplexed by a stock market that (inexplicably?) is once again on the rise -- along with all manner of commodities (oil, gold, silver, etc.)?

That, despite at best conflicting economic signals (continuing weak employment numbers, constricted lending, soft housing, etc.).

You shouldn't be.

Behind the scenes, the Federal Reserve has signalled its ongoing commitment to print money as a way to stimulate the economy, via a mechanism euphemistically labelled "quantitative easing."

"Grabbing Marshmallows"

So how should investors play such an environment?

If you have the stomach, take Barry Ritholtz's advice (my paraphrase):

When the Fed adds even more gasoline to the conflagration, [investors] should grab some some marshmallows and sticks and head over to the boy scout jamboree campfire.

--Barry Ritholtz, "Do You Wanna Be Right, or Do You Wanna Make Money?"

Note to the intrepid: the trick is not waiting around for the embers.