Oh the vanity of material possessions

Those of you who are into investing will note that, while the U.S. market was closed for MLK Day, overseas markets dropped over 5%, spooked by worries over financial stocks hit by the subprime fiasco.

It's interesting that American subprime borrowers could cause a global financial selloff - their debt got packaged into collateralized debt obligations, which were then sold and traded. Bond rating agencies rated them unreasonably highly, because when interest rates were low and property prices were rising, people could pay their mortgages. However, interest rates started to rise, and people couldn't pay. Then, masses of houses were sold, there was a glut of homes, and property prices started to drop. And then interest rates started falling, but that made no difference when people couldn't sell their houses.

I wonder why Wall Street venerates Martin. But anyway, a lot of people got greedy. Some bought houses they couldn't afford. Some facilitated the lending of money to the previous two groups; these folks had MBAs from top financial institutions, and surely they knew that someday it would come to an end?

I once scrawled, "Oh the vanity of material possessions" over all my boxes when I moved apartments. It didn't completely stop me from buying new stuff. However, it did help me to remember that stuff has a purpose. It must serve me for the long haul.

Businesspeople should remember the long haul. Too many thought they could make money in the short term. They invested for the short term. Well, there are a lot of investors who are investing for the long term. They have cash on the sidelines, ready to scoop up bargains - and there will be a lot of them. Those are the folks who will come out ahead.

All of us should remember that: think long-term. And remember, material possessions are vain: they only matter so far as they meet our needs or the needs of others.