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Steve Jobs Was The Modern-Day John Galt

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What if Ayn Rand’s iconic hero from Atlas Shrugged were among us? How would John Galt invest? The obvious answer would be to look at the advice given by the libertarian hero's self-proclaimed followers.

There is an abundance of high profile libertarian investors from Peter Schiff to Peter Thiel. Asset allocation and stock picks vary little across investors and (more worryingly) across time. Here are the five basics principles of libertarian investing:

  1. A visceral hatred for the U.S. dollar that extends to all U.S. dollar-denominated assets, from stocks to bonds – especially Treasuries.
  2. An unconditional love for precious metals, regardless of valuations. Commodities also rank high in libertarian portfolios.
  3. A blind faith in the “3Gs”: Gold, guns and groceries (ranked in this order)
  4. A preference for large companies with steady dividends. Only a handful of U.S. companies would make the cut, such as Johnson & Johnson (JNJ), Procter & Gamble (PG) and Colgate Palmolive (CL). European blue chips, such as Unilever, Nestle and Arcelor-Mittal are preferred because of their higher dividends and greater distance from the Federal Reserve and the U.S. politicians – Lucifer and his army of devils in libertarian cosmogony.
  5. A general distrust for anything that smells of Fed-handed bailouts – including banks, insurers, car-makers and conglomerates such as General Electric.

I doubt that John Galt would invest with his self-proclaimed followers. For one, they are horrible investors. The “libertarian portfolio” has taken a beating lately.  Gold and the SPDR Gold Trust (GLD) are down 20% from the peak. The U.S. dollar index has gained 11% since late April. European blue chips have sunk with the continent’s finances. Domestic value stocks have underperformed both cyclical and growth-oriented stocks as the U.S. economy proved surprisingly resilient in recent months.

A super hero such as John Galt would have never got stuck in that sucker’s portfolio.

Second, John Galt’s self-proclaimed followers fail to understand his message. Or rather, they only get one-half of it, the least important one. John Galt’s three-hour speech at the end of “Atlas Shrugged” does thunder with anger at unions, state-controlled companies and corrupt bureaucrats. That is only a prelude, however, to John Galt’s real argument: an unshakable faith in the grandeur of man, the power of the will and the strength of the human spirit.

In this sorry state of affairs, John Galt would not waste his time drawing moustaches on Obama’s pictures at hate rallies. He would roll up his sleeves and prove that human spirit can flourish under the harshest circumstances. He would ignore the pressure from shady politicians, greedy hedge fund managers and impatient shareholders. He would work tirelessly and steadily to build a company that displays equal perfection in its vision and in its execution. He would dare to stand up against its board if he felt his vision were compromised. He would not fear losing his job to keep his moral standards. And if he did lose his job, he would find another vehicle to shape his vision.

His success would be so astounding that the very people who fired him would beg to take him back. With this newly-acquired freedom, J. Galt (or should I say S. Jobs?) would take his company to heights that could not have been imagined before – swiftly overtaking his rivals to turn his creation into the world’s most valuable company, Apple (AAPL).

Alas, this specific entrepreneurial hero has left us orphans. But if there is one lesson to take from Atlas Shrugged, it is that human spirit will not be kept in chains. John Galt will rise again. I do not know where the next John Galt is. But I doubt that you will find him at a Tea Party rally near you.