Worldly Philosophers Club

The Worldly Philosophers, Vol.1, Number 6	May 13, 2007
THE Worldly Philosophers Club For Individualists Who Seek Worldly Wisdom

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General George S. Patton, Jr.

GENERAL PATTON'S SEVEN RULES OF SUCCESS
By Mark Skousen

"By perseverance, study and eternal desire, any man can become great."
-- Gen. George S. Patton, Jr.

Dear Worldly Philosophers,

This week I was in Sicily, along with 30 other subscribers, for the Grand Tour of Europe. Given that General George S. Patton led the 7th U. S. Army in Sicily during World War II, I gave a speech called "The Battle for Investment Survival."

Patton is one of my favorite historical figures, and as some of you know, I've played Patton a few times at investment conferences. George S. Patton Jr. (1885-1945) was in many ways a worldly philosopher extraordinaire. Although his profession was military, he had broad outside interests. He studied the classics and military history, loved sports and theater, and used his wealth to his advantage. He was married and had three children.

Patton had incredible drive and intelligence and although he had significant weaknesses (bad temper, womanizing), he was a worldly wise figure that can teach us a lot about life, both in business and finance. He was a military genius.

Advice to All Soldiers of Fortune

In my speech, "The Battle for Investment Survival" I came up with seven grand Patton principles that could apply to all us soldiers of fortune:

1. Always have a purpose or goal. Patton states, "A man must know his destiny." To succeed in life, you need to set targets. In finance, this means goals such as buying a house, retirement, financial independence, pay off debt, etc. Patton made it clear that you plan to achieve success need not be perfect or complete. He notes, "A good plan (solution), executed now, is better than a perfect plan next week."

2. Know your enemy. We all have enemies in life, bad habits we must overcome to succeed. In the investment world, we face many obstacles, such as inflation, taxes, fear, greed, or bad advice. Knowledge and education is key to overcoming our enemies. As Patton states, "Untutored courage is useless in the face of educated bullets." He adds this admonition for success: "Always do more than is required of you."

3. Depend on good intelligence. States Patton: "You are only as good as the men under you." In business and finance, you have to depend on good sources of information to be successful. Surround yourself with good counselors, and accurate reporting.

4. Know your strengths and minimize your mistakes. "Always be alert to the source of trouble," Patton says. Concentrate on what you know best, and avoid areas you are weak in.

Investment advisor Gerald Loeb wrote a book in 1965 called "The Battle for Investment Survival." It's a classic, even though out of print. He emphasizes that the best way to make a fortune is to concentrate rather than to diversify. He writes, "Those who will select and master one medium are better off than those who dabble in real estate, foreign exchange, commodities, obscure unlisted stocks, foreign bonds, etc. Really great fortunes were made by concentration. The greater your experiences, the greater your capability for running risks, and the greater your ability to chart your course yourself, the less you need to diversify." Patton would say Amen to that!

Of course, once you have made your fortune, then it pays to diversify and protect your profits.

5. Use a disciplined approach. Patton states, "Discipline is the key to all success in peace and war." Those who control their emotions of fear and greed are the best investors, business people, and individuals in society.

In investing, I recommend using protective and trailing stop orders as a disciplined approach to investing. You never know when you are wrong. As Patton states, "You shouldn't underestimate an enemy, but it is just as fatal to overestimate him."

6. Be a contrarian. As Patton says, "If everybody is thinking a like, nobody is thinking." This is especially valuable advice in the investment markets. As Humphrey Neill, the father of contrary investing, states, "The public is right during the trend, but wrong at both ends."

7. Be flexible. Patton warns, "Fixed fortifications are monuments to men's stupidity." Don't be married to some popular strategy that may soon fall out of favor. Over the years I've seen too many popular techniques that work for a while, then suddenly stop working. Be flexible and be prepared to change when necessary.

Let me end by quoting Patton again: "Americans love a winner and will not tolerate a loser." May you always be a winner in life.

Wisely yours, AEIOU,

Marcus Aurelius

P. S. Attention, Soldiers of Fortune! You are hereby ordered to appear at 12:00 on July 5 at FreedomFest headquarters, Bally's in Las Vegas. Make your reservations on the double! Report immediately to Conference Captain Tami Holland, 1-866-266-5101. Further instructions can be obtained at www.freedomfest.com. That's an order! Someday, years from now, your grandchildren will be sitting on your knee and will ask, "Grandpa, where were you on 07-07-07? You won't have to say, 'I was shoveling crap in Louisiana!' Instead, you can say 'I was at FreedomFest, the greatest show on earth and the beginning of a new age of liberty and prosperity in the world!"