Page 158 - Rich Dad's Increase Your Financial IQ: Get Smarter with Your Money

in value.

Lesson #6: Trends. A trend is developed when an investor takes
information from a set of facts and then forms an opinion. Let me tell you a
story that had a major impact on my life.

In late 1972, the North Vietnamese Army (NVA) crossed the
Demilitarized Zone (DMZ). The NVA was on its way to take Saigon,
known today as Ho Chi Minh City. The first major city south of the DMZ
was Quang Tri. We knew that if we did not stop them there, the war was

lost.
As we began to lose the battle for Quang Tri, I noticed some different
message traffic. One bit of information was that the South Vietnamese
people were trading their currency, the Vietnamese piaster, for gold leaf. I

thought this piece of obscure information was interesting.
As stated throughout this book, the U.S. dollar stopped being money and
became a currency in 1971. In 1973, while in Vietnam, I directly observed
the change in the rules of money via the information received about the

panic in the South Vietnamese people’s lives. They knew the war was lost
and they were on the losing side.
In 1971, gold was pegged at $35 an ounce. In 1973, I watched its price
go up past $80 an ounce. As the North Vietnamese began their march south,

fear was approaching a panic level. The rich who sided with the U.S. were
getting ready to run. Instead of clinging to the piaster or U.S. dollars, they
were buying all the gold they could get their hands on. One intelligence
report I received stated, “Confidence lost. People ready to flee. Trading

dollars and ‘P’s’ [piasters] for gold.”
Sitting in the Top Secret room, I realized that people wanted gold. I
assumed they knew gold would buy them passage to another country. I
could feel their anguish. They knew that gold could save their lives.

I knew the facts. The U.S. was losing the war. The enemy was taking
ground. Internationally, the dollar was dropping and gold was going up in
price. From the intelligence report, I knew the South Vietnamese people
were panicking and dumping their currency to buy gold. To me, this trend

was an investment opportunity. I used it to form an opinion.