July 2022 Newsletter

Do you know about the Dutch Tulip Mania Bubble of 1637? The prices of Tulip Bulbs began increasing in 1633 until dramatically collapsing in 1637. At the peak of the tulip mania, it’s been written that single bulbs sold for more than 10 times the annual income of a skilled artisan. Also reported is that the bubble ended when someone grabbed a bulb and bit into it. The details are contested but the fact that a bubble existed is not. Some people lost money in that bubble.

There have been many bubbles. Who’s to say that our current slide is not due to a bubble – or people saying, “It’s been good for too long; something has to happen.” Or, other people saying, “The government threw too much money at us, look at the high inflation we have. Now what?”

Of all the problems available to think or worry about, I choose the country’s debt. I believe everyone should work to be debt free. That goes for the government, no exceptions. There are individuals and companies that are debt free. I understand that the American Funds are debt free, a private company, with a strong balance sheet, a substantial amount of cash, and excellent at managing stock and bond accounts. Googins Advisors has always been debt free.

Mercatus Center tells us that the United States has reduced its debt-to-GDP ration three times since World War II: between 1946 and 1974, 1969 and 1979, and 1994 and 2001. The $29.6 trillion debt of the United States federal government is 1.3 times larger than the annual economic income of the country at the end of 2021 according to reports. Recently, Brian Wesbury, an economist with First Trust, estimated that if the US would freeze spending at current levels, the United States could rid itself of debt within 7 years. Isn’t it obvious we would have more to spend in all areas if we were not paying for past decisions bought with additional interest? Buying with interest does not give us more; it gives us less.

Reason Foundation and Mercatus Center have written extensively about Debt. Debt discussions can sound complicated, even sophisticated and some people will tell you that “debt is not dangerous” because the “US remains the World Reserve Currency”. Government spending in 1802 claimed 2% of our earnings; it is now up to 27% of our Gross Domestic Product. Government is expensive.

If people and government would choose to be debt free, I believe many of our problems would disappear.

It gives us great pleasure to report the following true stories. We have Investors who invested $10,800 years ago, pulled out over $16,000 and have accounts worth about
$80,000 today. We also have investors who invested about $765,000, took out about $500,000, and have over 1.5 million remaining. This is how your capital is intended to work for you. 1 million or 5 million, the numbers have worked out similarly.

John Templeton wrote 16 rules for Investment Success. Rule 4 finished with these messages: “Heed the words of the great pioneer of stock analysis Benjamin Graham; ‘Buy when most people…including experts…are pessimistic, and sell when they are actively optimistic.’ Bernard Baruch, advisor to presidents, was even more succinct: ‘Never follow the crowd.’”

“So simple in concept. So difficult in execution.” (John Templeton)

We appreciate your additional investments and referrals. Now is a good time to add to your investments for future years.



Louise Googins, President, Investment Advisor
Michael Googins, Administrator
Kim Rankin, Accountant
Richard Martin, Investment Advisor
Lynne Goldsmith, Investment Advisor
Dayton Hoffmann, UW-Madison Intern
Alex Kahlenberg, UW-Madison Intern