About the basic Tenets of our Investment & Wealth Creation Philosophy

I am frequently asked by friends what are the basic tenets of Blackhawk’s investment & wealth creation philosophy in a world that is increasingly dangerous, regulated and volatile. Well, to make a long story short and as a starter: The Firm does not believe in diversification. Take a close look at some of the greatest entrepreneurs in US history. Henry Ford never diversified, Bill Gates didn't diversify. The Firm strongly believes that the best way to create real wealth is to put one’s eggs in one basket and watch that basket (the right one) very carefully. In fact, one can go broke diversifying. Ask anyone who's diversified in the last three years. They've lost money. Nonprofessionals are always jumping around, thinking they have to do something. If they have a big success, they think they need another one right away. That's when hubris sets in at its worst. The Firm does not believe in supporting bailouts but rather believes it would be much better to let bailed out companies fail, rather than wait for six or eight of them to happen all at once. The system can recover from bankruptcies as it always did throughout history. After Lehman went down, the stock market didn't really collapse right away. It happened a month later, but people started blaming it on Lehman in hindsight. Bankruptcy cleans out the system….so what’s wrong with that? South Korea went through this in the late 1990s. They didn't have anyone to bail them out, and they had to go through the pain. Sweden did it in the early 1990s, Mexico did it, Russia did it. The list goes on and on. Competent people take over the assets from incompetent people and rebuild from a solid base. Survival of the fittest and Darwinism at its best. After all, this is what capitalism is all about. .........(more)