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Re: To Ken Levine re:recession risksNever quite sure how to respond to you Tigris as over the years it has become clear that we have completely different investment approaches. I can tell you that I like my approach and given 18 years averaging over 20% return per year, I am not likely to change. I do not understand you question "If you are unsure, why are you 60% in cash?"" If I was sure of a recession, I would go even more cash and if I was sure of no recession I would be close to all in. I have a large portfolio, so I am never all in, because I like a little cash to spare. And I would never be 100% cash as there are always exploration stocks that are about to drill and there price relies on things other than recessions, at least to some extent. "First of all, recessions are not necessarily bad for the stock market." Really? Name a recession where stocks did not fall pretty much in unison. The market may be forward looking and anticipate recoveries, but it also pays attention to the current actions, such as rising interest rates. Rising interest rates, in my experience, are not great for stock prices. Besides, why would I risk my cash profits now when I can simply wait and find a better entry point, I know people say you cannot time the market, but in my experience you can at least avoid the worst of the downside. I avoided most of the downside in 2008, 2014 in energy and 2020, by stepping aside for a few months. Again, in my experience the penalty (if any) for being in cash has been super easy to overcome, saving my cash in 2008, made me an average return of 150% in 2009 on a much high portfolio than I would have had if I did not have cash in 2008. And getting out at the being of March 2020 meant my covid crash loss was only about 20% and my subsequent gain from putting the money in gold and energy was far far greater than my covid crash losses. So when my banker calls to talk about all the cash in my accounts I just tell him I want it there as it is waiting for opportunity to knock. "" Cash is trash, especially now."" Cash is never trash, investing it in the wrong stuff can get it trashed, so I just wait with my cash and relax for the summer without the stress of being fully invested in bad markets during a bad time of the year. Perhaps it helps that I have more money than I will even spend and so do not need to constantly be trying to make more. Sure "in the long run, stocks outperform cash by a wide margin", if you like boring ETFs and know nothing about investing, then just do what I tell my kids to do and by ETFs that track the market, they know nothing about investing and so that is the way to go. By I have far different training and experience than they do and I have a love of exploration stocks, so I can look at individual stocks and invest and time them to make excess returns. I am not here to just invest in the markets, I am here for the challenge of significantly outperforming the markets, and so far with good success. "you would have to be super-confident in your ability to time the market to be 60% in cash." Why would you say that, I am taking no risk by holding cash for a little while, and I still have 40% in stocks that I consider likely to return me 50% or more in the next year. But because I buy high risk, I limit my exposure to any ond stock to about 5% of my portfolio, if someone mentions a new stock that looks good to me, I will buy some of it and perhaps reduce my cash to 55%, but I have not found any new stock recently, so I will sit and wait, and research. I have only been investing seriously since about 2003, but have been up to 60% cash and as low as no cash and it has never hurt my returns in the long run, as you can do the math. as to what kind of money I have made earning an average well over 20% over that period of time. I do have a certain amount of training, degree in Economics, Chartered Accountant/CPA and loads of personal research and experience business wise. Please keep on investing as you like and I will keep doing my investing my way, but to critic my style just because you cannot do it or because it does not fit into your idea of how it should be done just makes no sense to me. I am 1.5% in cash and have probably never been much above 5% in 48 years of investing. I also own no bonds even though I am over 70. Instead of cash or bonds I do own some high quality dividend payers like XOM, WMB or even PXT and CNE that allow me to ride the ups and downs of the market (as frightening as they are) without having to sell anything. I guess your crystal ball must be a lot clearer than mine. |
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Msg # | Subject | Author | Recs | Date Posted |
14945 | Re: To Ken Levine re:recession risks | tigris72poo | 3 | 8/7/2022 11:56:17 PM |