If an investor consistently takes positions based on forecasts, and changes those positions only when the market proves those forecasts wrong, that investor's life will predictably be dominated by hope, uncertainty, disappointment, reaction and frustration. If an investor constantly takes positions by responding to opportunities and conditions as they develop, with equanimity to what will happen next, making a habit of purchasing favorable value or early strength, and a similar habit of selling overvalue and early weakness, that investor's life will most probably be dominated by a sense of peace and control. Though it is not obvious which investor will have better results, my own opinion on that should be fairly clear.
Good stuff.
5 comments:
It's called rebalancing.
So I guess that I won't take any action yet based on today's forecast by Goldman that cyclicals are going to lead.
I agree to a certain extent. But, I still like the Permanent and Speculative Portfolio concept for the securities portion of my investments.
Where I differ from most on the Permanent Portfolio is that I will reluctantly change my PP, as I did after being convinced that Obama was electable because of the obvious sea-change economically, geo-politically or both. Merely re-balancing one's portfolio(s) from a wealth encouragement philosphy from the early 1980s-mid 2007 to wealth extortion (socialism) was not going to do the trick. Thus my PP looks very, very different from where it was a prior. My speculative portfolio is less risky than before, having mitigated risk, I believe.
I agree with your idea that portfolios need regular and timely attention. However, I do not want (or have the enthusiasm) to be a trader. I just like to see the money roll in, regardless of whether it is a bond, high-yield tax advantaged security, Obama-resistant stock, real estate income or one of a few eclectic investment I participate in.
I look back and laugh at some of the errors I have made, just as the professionals have - all too often. A sense of humor goes a long way when it's only some money that is lost and not anything truly important. Besides, I'm old enough now to get my share of your money on the gravy train!
T
Roger,
40 years ago I was watching the moon landing with my terminally ill mother in a little apartment in New York. It is a moment that I treasure most since my mother wanted to see such happening before she passed away. And today I realised how wrong everyone was back in June 25 when everyone was saying that the market was going down and even touching the march lows. Yet on that day I wrote “I am not very comfortable being in the camp that the market is going down since every one is in that camp - even the showemaker that I take my showes for repair. What if we go up and sideways til november 2009 and then we slide from that point til september 2010 bottoming in mid 2011. … therefore staging a bull market from mid 2011. My numbers (since I have set up, encouraged by this blog) support such scenario.” Roger, The Hussman, the Ritzholt and many others were in the camp that the market was going down. Yet, my numbers that have developed since the Yamada posts did not present such scenario. I am so happy that I have developed such a system and that I have made a personal plight into market analysis. I have to thank this blog for the encouragement.
Best,
Jeff from milan, italy
Roger.
I have been drinking because I am happy and sad. IMO get ready for a rally.
Unfortunately there is no reason for optimism to base the rally on. We will go higher and then back lower. I expect to make a few bucks and think your smart readers will simply bide time.
Unfortunately your nervous readers may loose their shirts. This is why I am so sad.
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