He Was One of the Best Pipe-Layers in Athens
“Did you ever hear of the ancient Athenian, called Alcibiades?”
It was exciting times back on December 11th, 1840.
President Martin Van Buren’s address to Congress was front page news in The New York Herald.
He began with, “Our devout gratitude is due to the Supreme Being for having graciously continued our beloved country, through the vicissitudes of another year.”
Then he went on to reject the thought of a national bank.
If a national bank was, as is undeniable, repudiated by the framers of the constitution as incompatible with the rights of the States and the liberties of the people; if, from the beginning, it has been regarded by large portions of our citizens as coming in direct collision with that great and vital amendment of the constitution, which declares that all powers not conferred by that instrument on the General Government are reserved to the States and to the people… what national grounds could have been conceived for anticipating aught but determined opposition to such an institution at the present day.
Oh my, how things have changed?!
Seventy-three years later Congress passed the Federal Reserve Act (which created the Federal Reserve – the central bank of the U.S.). President Woodrow Wilson signed it into law.
Now, central bankers rule the world.
So much for President Van Buren’s remarks about a national bank being incompatible with the constitution.
There was another interesting article that day in The New York Herald too. It was an editorial telling the story of Alcibiades.
As the story goes, he was one of the best pipe-layers in Athens. But he was a shady character.
According to the editorial,
When he wanted to prevent the people of Athens from peering too narrowly into his conduct, he would take his favorite dog, cut of his tail, and send him howling and yelping through the streets, with people shouting at his heels.
By this ingenious system, Alcibiades, the great Athenian pipe-layer, contrived to divert the attention of the people, and to lead them astray, when they showed any disposition to investigate his conduct, and to bring light to his crimes.
They went on to tell the people of New York…
There is a number of persons in Wall Street, calling themselves respectable members of society, claiming to be leaders of the Whig Party, candidates for high and lucrative offices, accused of furnishing $8,000 for the purpose of corrupting the elections of this city in 1838 and ’39 – and of perpetrating a gross fraud on the election laws, and yet every effort is made by falsehood, defamation, slander, intimidation, tin-pans and outrage, to deter the regular judicial tribunals from making an investigation into the facts, or of ascertaining the truth of the charges.
To put it in context, an $8,000 bribe in 1840 is the equivalent of $195,200 as of 2016 inflation data.
Human nature is the same whether it’s 1840 or 2017.
Even the book of Ecclesiastes talked about this almost three thousand years ago.
What has been, that will be; what has been done, that will be done. Nothing is new under the sun! – Ecclesiastes 1:9
The point is that there will always be characters like Alcibiades in politics, government, geopolitics or on Wall St etc.
Here at The Champion Investor, my focus is on helping readers build and preserve wealth.
To do that we need to keep our eye on the ball. In other words, investors need to ignore the howling and yelping in the news.
One way to do that is to start a “healthy news diet.”
Another way to keep your eye on the ball is by understanding asset allocation. Did you take a few minutes to look at your portfolio this weekend?
I explained last week that 100% of return levels come from asset allocation. Most investors don’t know this. The ones who do have a big advantage over their neighbors.
It’s one of the most powerful concepts for investing success.
It’s key to avoiding catastrophic losses. It’s also key for building and preserving wealth.
Sit down. Look at your asset allocation. Is all your money in one stock fund? Or worse, one stock?
There’s a place for individual stocks within a portfolio. But figure out your asset allocation.
Get that right first.