QUESTION: Hi Marty, I just read the latest blog post. Thanks for the advice re: hard assets. I’m wondering though about any asset which is not in one’s personal custody, i.e. stocks in street name. If we suffer a partial collapse don’t you think the banks and brokerages will suffer to the extent of a Bear Stearns or an MF Global for instance. Would you suggest taking custody of the stock certificates if possible? Thanks for all your shared knowledge!
ANSWER: If you are looking at parking money in bluechip stocks rather than trade, do not leave those shares in Street Name. Take delivery. Even with regard to gold. When you are looking for a parking spot v trading, then ALWAYS take delivery. Do not even leave such things in a safe deposit box.
Keep in mind that a secure bank or brokerage house is still impacted by others. The interconnectivity can be far too complex to keep track of. Much of the reforms of Dodd-Frank made things much worse. The next crash will be concentrated in bonds this time. Keep in mind that Andrew Mellon said that Gentlemen refer bonds. That statement proved to also be fatal during the Great Depression. Countless foreign bonds defaulted and were delisted. A stock that goes into bankruptcy typically returns something unless it was a dream start-up. Government bonds MORE-OFTEN-THEN-NOT, simply evaporate and the government will never prosecute itself.