Hard Asset

Uh...yeah. It takes a lot of hard work to get an asset like that. Ripped 8-pack. Tons of sit-ups...and that quarter in the Chinese prison camp helped.

So…okay, a hard asset is just one that you can...bang on. Touch. Engage with. Sell.

Examples?

Oil. Gold. A vintage 1957 Ferrari with beige leather interior. 4,000 head of longhorn cattle in texas. A commercial building in the best part of town. All of these are, more or less, commodities. Well, ok ok...the category is rare cars, art, coins…stamps…stuff like that.

So why do you care if something is a hard asset? Well, most hard assets are commodities. And they generally do very well in periods of very high inflation.

The Fed is raising rates a point a quarter? Equities and bonds will get crushed. Commodities? They’ll keep up with the spike in prices, causing the Fed to raise rates. So they’re a good hedge for most investment portfolios.

Not all of them are great forever. Like...check out real inflation-adjusted oil prices the last few decades. Not a good run. Most, not all, do well. And oil will likely have its day in the sun again at some point…Elon.

When in doubt, remember what Kim Kardashian and Warren Buffett said:

"A good asset is hard to find." "A hard asset is good to find." We won’t say who said which.