IN 1949 George Orwell said amongst predictions for his ‘1984’ titled book that “the people will not revolt. They will not look up from their screens long enough to notice what is happening”.

I can’t help thinking this prediction is highly relevant for our present financial situation.

How anyone could be reckless to the point of investing heavily in crypto currencies is beyond my comprehension.

The present failure of another crypto currency exchange must surely shine some light on the irrational nature of getting involved in that game.

It clearly identifies the need for people to understand that there are two types of so-called investors out there.

My preference is for the ‘Genuine Investor’, who researches the item and its cycles before putting money into it.

Once that happens, they need to remain holding it for as long as it achieves the purpose for which it was selected.

You grow with the company, piece of real estate or discounted bond and hope to remain there for the long term.

If you have done your homework correctly in the first place, then you only need to be aware of their reports and performance in order to achieve success.

The other type of so-called investor is really a short-term punter often referred to in the share market as a ‘Day Trader’.

The deal here is to buy cheaply and sell at a higher price as quickly as the market will allow as their way of generating a profit.

They do not hold the product for long enough to generate dividend income and certainly don’t give themselves any chance of gaining from inflation which has proven to be investors’ biggest winner in recent years in Australia.

These short-term punters are then taxed at their highest personal level because their profits are generated within a twelve month time limit that applies for income tax rather than to hold for over twelve months in order to achieve the lower tax level that applies to capital gains revenues.

If you follow the gambling messages nightly on our TV screens which suggest that mostly you lose when playing short term, high-risk, so-called investments, then that message should be clear.

Of course, they refer to betting on sporting events, or online gambling opportunities, but surely stock market or real estate punts have similar risks.

With many people today living with their noses jammed into their phones or locked into social media, the very wise words of George Orwell are probably ringing true in these financially challenging times.

We have been warned by these bards of old who, with the effluxion of time, have proven their ability to predict the future.

It is indeed interesting to note this week’s headlines, probably generated by the readjustment of share market prices, with economists warning the slowdown could wipe out much of Australia’s Budget surplus.

They also say that resources and energy export earnings are tipped to fall.

If they are listening, the short term ‘punter’ investors might want to raise their eyes from the screen.

So many of them believe that “the trend is their friend”, blindly following the pack, often into mild panic, whilst the genuine long term quality investor lives on happily in the understanding that their quality investments had a life well before they were born and will almost certainly live on and do well, long after they are gone.

By John BLACKBOURN