“John, one thing I can promise you, even in this market, is that I never ask my clients to judge me on my winners. I ask them to judge me on my losers because I have so few. And in the case of Aerotyne, based on every technical factor out there, John, we are looking at a grand slam home run.” Jordan Belfort
The wolf got off to a rocky start on Wall Street. His first day was 'Black Monday' October 19, 1987 when the stock market collapsed. It was also his last day at Rothschild and Jordan Belfort found himself applying for a job as a 'Penny Stock' broker where the commissions were 50% versus 1% for 'Blue Chips'. He hopped straight on the phone, worked his charm and pocketed a $2k commission. Was there substance to his claims? The wolf didn't care.
Yesterday, J-Berg announced, stoically, that our economy is officially in recession. No-one is surprised. Today, he and ScoMo are all over the news launching the HomeBuilder scheme offering people a $25k boost if they build a new home or spend $150k on renovating their home. It has been pitched as a step down the long road to recovery at a cost of $688m. I have grave doubts, like most of these initiatives, that they will be able to spend the money. Without diving too deeply into housing industry forecasts, it will require 27,520 successful applications. It will require bank approvals, which will rely on income and job security of the applicants. Aren't the majority of new home buyers, middle income earners from vulnerable industries? It all sounds like a new house of cards to me. Furthermore, I have previously preached the perils of investing in industries with international supply chains. I also can't see the logic behind burying money in the ground.
When are these guys going to realise that the Hospitality industry has the ability to create jobs, stimulate activity, support local supply chains and rebuild the economy? We are the star player in the team, but the coach keeps naming us on the bench. Investing in industries that are less affected and have less ability to aid economic recovery, is the equivalent of selling 'Penny Stocks' to the Australian people. They generate higher political commissions but don't generate return for the real investor, the tax payer.
J-Berg, get out of the Investor Center and back to Wall Street. Stop pitching 'Penny Stocks' and start investing in the 'Blue Chip' Hospitality industry. I'll be judging.