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Of Fear, Stocks and Cheese By Stephen J. Butler

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The book "Who Moved My Cheese?" by Spencer Johnson, M.D. has been on the bestseller list for many, many months. Barnes & Noble is getting so sick of it that they are limiting their bestseller list to just twelve months. No matter how well you are selling after that, your book doesn't get to be on the list anymore.

I finally broke down and bought a copy of "Cheese" (on sale at 30% off) because I had to understand why this book sold millions while my book, "401(k) Today," has only sold in the thousands.

The basic premise of "Cheese," which you can read in twenty minutes, is this: Situations change and we need to change with them. Our biggest fear is fear itself. We will hang on to a situation that is familiar and comfortable even if our world is crumbling around us.

We can apply this condition to our professional lives, our relationships, and of course, our retirement nest eggs. A friend once told me, "You know, I've worried all my life and nothing really bad has happened yet, so it's an approach to life that works for me."

Unfortunately, most fear and worry is irrational and a waste of energy. The stock market is a pure expression of the giant swings of emotional fervor that shape the behavior of investors. We can argue that the true value of the stock market is the average historical Price Earnings ratio, but the investing public bids this ratio up and down and creates, in effect, a barometer of public angst.

So who DID move our cheese? And what are we going to do about it? Werner Erhard (remember him?) of the EST Training program used to say that the only difference between human beings and rats was that rats went down another path in the maze when they couldn't find cheese in the usual place. Humans, by comparison, just keep on going down the same path over and over.

"Cheese" talks about the need to develop a comfort level with change. The ultimate message of the book is that change is generally a good, stimulating experience. Managed effectively, change can snap us out of our lethargy and lead to a more fulfilling experience of life.

Do we need a few examples from the investment world? Let's start with the plunging rates of Certificates of Deposit (CD's.) This steep decline should prompt retirees living on fixed income investments to explore other investment vehicles that pay higher rates of interest. Forced by circumstances to take on a bit more risk, we can learn that what we thought was more risk goes away with more time. Meanwhile, we are left with more money.

Terrorists in America? Their threat may change the level of civil liberties we enjoy in a free and open society. It is very difficult to say how the recent events will impact our lives over the next five or ten years. Capturing or eliminating Mr. Bin Laden will hardly mark the end of this struggle. For any stated call for a suicide bomber, there are reportedly as many as ten volunteers. However, an entire industrial world is adversely impacted by what happened in New York, so worldwide intelligence and crime-fighting techniques will make it more difficult for the "fish to swim in the sea" (as Mao used to say of his infiltrators.)

Bumping fuel taxes by two or more dollars per gallon (creating European fuel prices) may be the only way to wean ourselves from the tremendous demand for oil that influences our judgments about Middle Eastern politics. The root cause of our worst diplomatic mistakes in the region appears to be the imperative for stabilizing oil production. Imagine how we would be treating Cuba today if there was oil under that island country.

We're living the old STP oil treatment commercial, "Pay me now or pay me later." A high tax today will encourage and help pay for alternate forms of energy and stave off the day when our progeny will be living like the characters in the Mel Gibson movie "Road Warrior" --- battling for the last few drops of gasoline on the planet. Meanwhile, the extra tax dollars can help to pay for our immediate and expensive war against terrorism.

Archibald Cox, the special counsel during the Nixon-era Watimages/our_strategy.gif" align="top">

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