Pine or Oak – an economic analogy
October 25, 2008 – 10:36 am
Elephant ears
I spent the early part of this morning picking up debris after last night’s deluge. A very large limb had fallen from the pine tree into the pond. Looking up into the tree, I noticed how well this tree prunes itself. You could see the stubs of every limb standing like testaments to their fall. The oak, on the other hand, seems to hold onto its dead limbs, releasing them only in violent windstorms. It got me thinking. Which is better? To clean out as you go or hold onto something long after its value has passed. Sort of like our economic situation.
I’ve read blog after blog about our current situation and very few of them agree. Some say dump whatever you can and run for the hills. Some say get your cash and hold for opportunities soon to come. Others say buy, buy, buy because you’ll miss the bottom and won’t know it until things are rising too fast to catch it again.
Self pruning pine tree
Since no one seems to have a crystal ball, I say, trust your gut. If you’re like the pine tree you will have already sold off what you felt you needed to sell. If you’re more like the oak, you’ll hold on and wait for better days to bring your investments back to life. There’s a place for both in the forest. In other words, whether you think you’re right or you think you’re wrong, either way, you’re correct.
Water oak
