Diversifying is important. For years I've been kicking myself for buying real estate instead of just the stock market. Well, right now my real estate is the superstar.

dajo9 said:

---

Diversifying is important. For years I've been kicking myself for buying real estate instead of just the stock market. Well, right now my real estate is the superstar.

---

But then your RE is part of your diversification.

cbbass1 said:

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DiabloWags said:

---

cbbass1 said:

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The politics isn't the only reason for crashing the economy.

---

Please explain the basis for your claim that politics is behind crashing the economy.
Be specific.

---

Sure.

Example: Oil companies & the Saudis have a political preference. Though the oil companies invest heavily in the Dems in order to prevent any action on Climate Change, it's clear that the oil companies would prefer to have Republicans in the majority in both House & Senate. The Saudis clearly prefer Trump & Jared over Biden, because they're easier to purchase, less likely to have issues with Mohammed bin Bonesaw, and less likely to interfere with arms sales for their war against Yemen.

On top of that, with the GOP in the majority, Capital will finally be in a position to "run the table", ignore regulations, especially on Labor and the environment, ignore climate change, and rig elections in their favor nationwide.

So the GOP and Capital have a strong financial interest in drowning small-d democracy in the bathtub. This is accomplished by crashing the economy, and then blaming it on the Dems.

It's not just the oil companies. Health insurers and pharmaceuticals also prefer to have GOP majorities in Congress, and to ignore government regulations and regulators, if the 6-3 SCOTUS doesn't declare all regulations of business unconstitutional first.

When the bubble bursts, those who have cash, and lots of it, are in a position to buy companies, properties, and assets for pennies on the dollar. Those companies that were borrowing & rolling over their debt are in a difficult position, and will either go under or sell out.

The other reason for Capital to crash the economy is to re-exert disproportionate leverage over workers. IF I'm correct on this, expect the Recession / Depression that follows to also lead to massive layoffs and unemployment, with Union members being fired en masse, illegally. The last thing that Capital wants is to have millions of unemployed voters having political power, and voting. So the easy solution for Capital is to have the disgruntled masses voting GOP. There, they can lash out with violent rhetoric against Biden & the Democrats, but the Republicans never have to promise them anything economically!

---

I'm afraid that you're so in love with your "Labor vs Capital" narrative that you constantly promote here in just about every thread that you post, that it misses key important facts in service of your ideology - - - such as how the FED will be creating the Recession that you speak of, and yet they aren't owned by the GOP. In fact, they literally arent owned by anyone.
It was given that unbridled power and autonomy by Congress in 1913.

No where in your "narrative" above is any mention of the FED.

I guess you're too busy pointing the finger at Big Oil, Big Pharma, and SCOTUS.
Corporate board rooms looking to "crash" the American economy?
Sadly, your post sounds like one big Conspiracy.

Given your narrative, I cant imagine you being invested in the financial markets.

cbbass1 said:

---

DiabloWags said:

---

cbbass1 said:

---

The politics isn't the only reason for crashing the economy.

---

Please explain the basis for your claim that politics is behind crashing the economy.
Be specific.

---

Sure.

Example: Oil companies & the Saudis have a political preference. Though the oil companies invest heavily in the Dems in order to prevent any action on Climate Change, it's clear that the oil companies would prefer to have Republicans in the majority in both House & Senate. The Saudis clearly prefer Trump & Jared over Biden, because they're easier to purchase, less likely to have issues with Mohammed bin Bonesaw, and less likely to interfere with arms sales for their war against Yemen.

On top of that, with the GOP in the majority, Capital will finally be in a position to "run the table", ignore regulations, especially on Labor and the environment, ignore climate change, and rig elections in their favor nationwide.

So the GOP and Capital have a strong financial interest in drowning small-d democracy in the bathtub. This is accomplished by crashing the economy, and then blaming it on the Dems.

It's not just the oil companies. Health insurers and pharmaceuticals also prefer to have GOP majorities in Congress, and to ignore government regulations and regulators, if the 6-3 SCOTUS doesn't declare all regulations of business unconstitutional first.

When the bubble bursts, those who have cash, and lots of it, are in a position to buy companies, properties, and assets for pennies on the dollar. Those companies that were borrowing & rolling over their debt are in a difficult position, and will either go under or sell out.

The other reason for Capital to crash the economy is to re-exert disproportionate leverage over workers. IF I'm correct on this, expect the Recession / Depression that follows to also lead to massive layoffs and unemployment, with Union members being fired en masse, illegally. The last thing that Capital wants is to have millions of unemployed voters having political power, and voting. So the easy solution for Capital is to have the disgruntled masses voting GOP. There, they can lash out with violent rhetoric against Biden & the Democrats, but the Republicans never have to promise them anything economically!

---

I'm sorry but I just have to shake my head at this.

The sheer fantasy that boards of directors of public companies or executive officers are sitting around like in some Bond movie scheming long term strategy to help one party or another is just so beyond reality that I have no idea why you are writing like you have experience or knowledge. I myself have advised boards for most of my career as the general counsel and corporate secretary and have attended ops reviews and strategy sessions with c-suite. What you write is not even in the same dimension of possible as if there is some political person behind the curtain in some collusive fashion for all public companies in an industry. Just odd that people with no practical or actual knowledge write this stuff on something they clearly have never seen in person. Anyone with any experience ( which would include number of people here) with actual leadership in a public company will know how odd and removed from reality this take is. If you think this is unfair, please identify your actual in person experience with public boards to provide your insight on how governance works with these public energy companies.

calbear93 said:

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82gradDLSdad said:

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dimitrig said:

---

DiabloWags said:

---

dimitrig said:

---

DiabloWags said:

---

dimitrig said:

---

DiabloWags said:

---

Huh?

I have a feeling that anyone who owns shares of TGT today is NOT in agreement with you and thinking that this is hardly some sort of collapse in TGT stock.

Target hasnt traded this low since October of 2020.
That's a whole lot of investors that are underwater.

---

You have the mindset of a trader, not an investor.

---

I have a feeling that you and Cbbass1 werent around for Black Monday of 1987
That's the last time that Target shares plunged as much as they did today.

---

I remember Black Monday, although I was not invested.

The markets recovered very quickly.

---

Markets clearly arent recovering quickly.
They arent recovering at all.
Just ask Cathie Wood.
This isnt 1987.

You dont fight the Fed.

---

It depends on your timeline.

If you have conviction in the companies you are invested in then consider this a sale.

It took 7 years to recover after the 2000 Internet bubble popped.

My strategy is as follows:

1. Buy what I know.

This is advice from Warren Buffet, but it is good advice. If I don't know about something I might research it such that I might eventually be educated about it but I don't buy it if I don't understand the business.

2. Know what I own.

I don't buy an investment because it performed well in the past or because some pundit talked it up. In general I am not trying to trade complex derivatives or invest in instruments that don't interest me even if they can be lucrative. I know my limitations.

3. Understand my tolerance for risk.

I never make trades based on fear or fear-of-missing-out. Fearful people sell perfectly good investments just because they had a bad day/week/month/year. People afraid of missing out often buy only at the tops. I am comfortable buying and holding and buying more and holding some more. I know not everyone is like that, but it fits my risk tolerance. I stopped constantly chasing returns a long time ago. I only place bets at the casino when it is for entertainment purposes only.


4. Diversify

The best returns come from picking a handful of winners and riding them for years, but very few people can consistently pick winners. I am not one of them. During the slumps I don't lose any sleep because I understand my tolerance for risk and have allocated my investments appropriately.

5. Focus on the long term

I started investing while I was in high school (Janus Mutual Funds) and I have never sold a position based on what the broader market was doing. I have, however, added to positions when the broader market sentiment was down and took quality names down with it. As I told a coworker once when the Internet bubble popped and my portfolio took a 50% haircut: "The goal is to buy low and sell high, not buy low and sell lower." It took 7 years to recover from that, but it did recover and then some. To me that was a bigger lesson than some Black Friday selloff.

---

Summed up: but a low cost S&P500 fund or ETF and keep investing in it week in and week out, buying low, buying high, buying medium. You will be happy in retirement. I am.
Now with all my money I'm getting stupid. A few individual stocks here, a few options there... luckily I have enough money.

---

Great advices from both of you on investment discipline. I would also add that people should always live below their means and avoid debt other than, when young, mortgage. Financial freedom and not being a slave to money open up so much enjoyment in life.

---

And great advice from you CB93....Helping the two oldest GDs in the work force for 2/3 years living below their means. Both have reasonable, but not thru the moon, salaries and have one year salary in emergency funds and investment below 25. Gives a security of control, plus fun. When they see the projections on an interest rate calculator of 10,20,40 year positioning it becomes a real incentive. Using time now saves using more dinero later.

dimitrig said:

---

5. Focus on the long term

I started investing while I was in high school (Janus Mutual Funds) and I have never sold a position based on what the broader market was doing. I have, however, added to positions when the broader market sentiment was down and took quality names down with it. As I told a coworker once when the Internet bubble popped and my portfolio took a 50% haircut: "The goal is to buy low and sell high, not buy low and sell lower." It took 7 years to recover from that, but it did recover and then some. To me that was a bigger lesson than some Black Friday selloff.

---

Yes, the goal is not to "buy low and sell lower".

I would strongly suggest that what's more important is what you do WITH YOUR LOSERS.
No where in your 5 talking points on investing explains what you do with your losers.

The reason that I bring this up is, is because while you waited for 7 years for your account/portfolio to recover from the Dot-Com collapse, the fact of the matter is that it took 17 years for the S&P 500 Information Technology Index to finally break the record it set back in March 2000. - - - Moreover, a ton of those companies are no longer around.

There is a learning curve when it comes to developing a successful methodology to being an investor.
And your risk/reward ratio is only as good as your ability to execute your methodology.
Figuring out the best methodology for your goals takes time.
It doesnt just happen overnight.

In fact, I would place far more importance on your #2 and "knowing what you own" than your #5.
#5 can literally kill you.

Knowing what you own really should be the relevant question here. In fact, it should be the preeminent question here.

Because if you own a company or companies that arent able to grow and have a management team that can execute, then it doesnt matter how many times you average down and keep buying their shares. You're going to wind up with a substantial portion of capital deployed in a company that isnt going anywhere.

Knowing how to identify your "losers" and what you do with them should be the single biggest component of your investing methodology. It can help you stay in the game and avoid large drawdowns that literally have you "frozen" for years.

DiabloWags said:

---

dimitrig said:

---

5. Focus on the long term

I started investing while I was in high school (Janus Mutual Funds) and I have never sold a position based on what the broader market was doing. I have, however, added to positions when the broader market sentiment was down and took quality names down with it. As I told a coworker once when the Internet bubble popped and my portfolio took a 50% haircut: "The goal is to buy low and sell high, not buy low and sell lower." It took 7 years to recover from that, but it did recover and then some. To me that was a bigger lesson than some Black Friday selloff.

---

Yes, the goal is not to "buy low and sell lower".

I would strongly suggest that what's more important is what you do WITH YOUR LOSERS.
No where in your 5 talking points on investing explains what you do with your losers.

The reason that I bring this up is, is because while you waited for 7 years for your account/portfolio to recover from the Dot-Com collapse, the fact of the matter is that it took 17 years for the S&P 500 Information Technology Index to finally break the record it set back in March 2000. - - - Moreover, a ton of those companies are no longer around.

There is a learning curve when it comes to developing a successful methodology to being an investor.
And your risk/reward ratio is only as good as your ability to execute your methodology.

In fact, I would place far more importance on your #2 and "knowing what you own" than your #5.

#5 can literally kill you. Knowing what you own and should be the relevant question here. Because if you own a company or companies that arent able to grow and with a management team that can execute, then it doesnt matter how many times you average down and keep buying their shares. You're going to wind up with a substantial portion of capital deployed in a company that isnt going anywhere.

Knowing how to identify your "losers" and what you do with them should be the single biggest component of your investing methodology. It can help you stay in the game and avoid large drawdowns that literally have you "frozen".

---

The 17 years to recover stat is why it's important to be investing, in S&P 500, on the way up, down and sideways. If you just buy when everything looks good it will take you a long time to recover when the crashes come. I was only able to absorb my IBM layoff at age 55 in 2015 because my peak earning years coincided with the great recession. I was loading my 401k, Roth and IBonds before and after having 'lost' 60% in 2008-2009. It wasn't easy but with the benefit of hindsight I look like a genius just because I followed a very tried and true investment axiom. I would be careful with investing in individual stocks if they are forming the basis of your lifetime portfolio. I don't care how well you 'know' them.

OdontoBear66 said:

---

calbear93 said:

---

82gradDLSdad said:

---

dimitrig said:

---

DiabloWags said:

---

dimitrig said:

---

DiabloWags said:

---

dimitrig said:

---

DiabloWags said:

---

Huh?

I have a feeling that anyone who owns shares of TGT today is NOT in agreement with you and thinking that this is hardly some sort of collapse in TGT stock.

Target hasnt traded this low since October of 2020.
That's a whole lot of investors that are underwater.

---

You have the mindset of a trader, not an investor.

---

I have a feeling that you and Cbbass1 werent around for Black Monday of 1987
That's the last time that Target shares plunged as much as they did today.

---

I remember Black Monday, although I was not invested.

The markets recovered very quickly.

---

Markets clearly arent recovering quickly.
They arent recovering at all.
Just ask Cathie Wood.
This isnt 1987.

You dont fight the Fed.

---

It depends on your timeline.

If you have conviction in the companies you are invested in then consider this a sale.

It took 7 years to recover after the 2000 Internet bubble popped.

My strategy is as follows:

1. Buy what I know.

This is advice from Warren Buffet, but it is good advice. If I don't know about something I might research it such that I might eventually be educated about it but I don't buy it if I don't understand the business.

2. Know what I own.

I don't buy an investment because it performed well in the past or because some pundit talked it up. In general I am not trying to trade complex derivatives or invest in instruments that don't interest me even if they can be lucrative. I know my limitations.

3. Understand my tolerance for risk.

I never make trades based on fear or fear-of-missing-out. Fearful people sell perfectly good investments just because they had a bad day/week/month/year. People afraid of missing out often buy only at the tops. I am comfortable buying and holding and buying more and holding some more. I know not everyone is like that, but it fits my risk tolerance. I stopped constantly chasing returns a long time ago. I only place bets at the casino when it is for entertainment purposes only.


4. Diversify

The best returns come from picking a handful of winners and riding them for years, but very few people can consistently pick winners. I am not one of them. During the slumps I don't lose any sleep because I understand my tolerance for risk and have allocated my investments appropriately.

5. Focus on the long term

I started investing while I was in high school (Janus Mutual Funds) and I have never sold a position based on what the broader market was doing. I have, however, added to positions when the broader market sentiment was down and took quality names down with it. As I told a coworker once when the Internet bubble popped and my portfolio took a 50% haircut: "The goal is to buy low and sell high, not buy low and sell lower." It took 7 years to recover from that, but it did recover and then some. To me that was a bigger lesson than some Black Friday selloff.

---

Summed up: but a low cost S&P500 fund or ETF and keep investing in it week in and week out, buying low, buying high, buying medium. You will be happy in retirement. I am.
Now with all my money I'm getting stupid. A few individual stocks here, a few options there... luckily I have enough money.

---

Great advices from both of you on investment discipline. I would also add that people should always live below their means and avoid debt other than, when young, mortgage. Financial freedom and not being a slave to money open up so much enjoyment in life.

---

And great advice from you CB93....Helping the two oldest GDs in the work force for 2/3 years living below their means. Both have reasonable, but not thru the moon, salaries and have one year salary in emergency funds and investment below 25. Gives a security of control, plus fun. When they see the projections on an interest rate calculator of 10,20,40 year positioning it becomes a real incentive. Using time now saves using more dinero later.

---

Teaching financial literacy and discipline to the younger generation is an awesome gift.

82gradDLSdad said:

---

DiabloWags said:

---

dimitrig said:

---

5. Focus on the long term

I started investing while I was in high school (Janus Mutual Funds) and I have never sold a position based on what the broader market was doing. I have, however, added to positions when the broader market sentiment was down and took quality names down with it. As I told a coworker once when the Internet bubble popped and my portfolio took a 50% haircut: "The goal is to buy low and sell high, not buy low and sell lower." It took 7 years to recover from that, but it did recover and then some. To me that was a bigger lesson than some Black Friday selloff.

---

Yes, the goal is not to "buy low and sell lower".

I would strongly suggest that what's more important is what you do WITH YOUR LOSERS.
No where in your 5 talking points on investing explains what you do with your losers.

The reason that I bring this up is, is because while you waited for 7 years for your account/portfolio to recover from the Dot-Com collapse, the fact of the matter is that it took 17 years for the S&P 500 Information Technology Index to finally break the record it set back in March 2000. - - - Moreover, a ton of those companies are no longer around.

There is a learning curve when it comes to developing a successful methodology to being an investor.
And your risk/reward ratio is only as good as your ability to execute your methodology.

In fact, I would place far more importance on your #2 and "knowing what you own" than your #5.

#5 can literally kill you. Knowing what you own and should be the relevant question here. Because if you own a company or companies that arent able to grow and with a management team that can execute, then it doesnt matter how many times you average down and keep buying their shares. You're going to wind up with a substantial portion of capital deployed in a company that isnt going anywhere.

Knowing how to identify your "losers" and what you do with them should be the single biggest component of your investing methodology. It can help you stay in the game and avoid large drawdowns that literally have you "frozen".

---

The 17 years to recover stat is why it's important to be investing, in S&P 500, on the way up, down and sideways. If you just buy when everything looks good it will take you a long time to recover when the crashes come. I was only able to absorb my IBM layoff at age 55 in 2015 because my peak earning years coincided with the great recession. I was loading my 401k, Roth and IBonds before and after having 'lost' 60% in 2008-2009. It wasn't easy but with the benefit of hindsight I look like a genius just because I followed a very tried and true investment axiom. I would be careful with investing in individual stocks if they are forming the basis of your lifetime portfolio. I don't care how well you 'know' them.

---

For passive investors, your strategy will pay off in the long run. The market beats most active fund managers. If you know the company, are willing to invest in a specific company and have conviction, then hold and continue the research until your conviction changes. Apple, Danaher, Roper, etc. have been in my portfolio for decades through thick and thin because nothing about their business or management changed my conviction during the down period but provided comfort that they will come out even better as the macroeconomic conditions filter out the weaker players. The only time I sold big was in 2020 because of inflation concerns and it was only those I had bought within 5 years where valuation in light of quality of management and competitive advantage did not match the high valuation in what I anticipated would be higher interest rate and recessionary cycle. Most people don't have the level of interest or professional experience to research and study individual companies ( I mostly benefited from basic investment strategy advice and market trends from friends who also happened to be really smart professional fund managers who love studying companies and valuation).

82gradDLSdad said:

---

The 17 years to recover stat is why it's important to be investing, in S&P 500, on the way up, down and sideways. If you just buy when everything looks good it will take you a long time to recover when the crashes come. I was only able to absorb my IBM layoff at age 55 in 2015 because my peak earning years coincided with the great recession. I was loading my 401k, Roth and IBonds before and after having 'lost' 60% in 2008-2009. It wasn't easy but with the benefit of hindsight I look like a genius just because I followed a very tried and true investment axiom. I would be careful with investing in individual stocks if they are forming the basis of your lifetime portfolio. I don't care how well you 'know' them.

---

I think that you'd probably agree with me that how old you are and where you are in your career (peak earnings years) or career path is a very important consideration when assessing your risk tolerance.

You also have to know yourself.
What your strengths are and weaknesses are.
Being disciplined and riding out the highs and lows without a lot of emotion.
Easier said than done, especially if you arent diversified and are taking the Stanley Druckenmiller approach of making concentrated "bets" to creating wealth.

I'm probably the antithesis of 99% of the posters in this thread.
I'm not diversified. I really dont invest in index funds or do any passive investing. I've never been a bondholder.
In fact, since graduating from CAL in 1982, I've spent 98% of my career working for myself.

My goal has always been to be able to identify really good management teams who are able to drive growth and innovation while facing a massive addressable market. Obviously, doing so requires more than just the typical "retail" investor approach of being diversified and allocating one's capital in the typical "60/40" balanced fund.

It's an investing style that certainly is not for everybody.
Lots of risk.

And it's certainly a long ways away from the the trader that I was during the first 20+ years of my career.

DiabloWags said:

---

dimitrig said:

---

5. Focus on the long term

I started investing while I was in high school (Janus Mutual Funds) and I have never sold a position based on what the broader market was doing. I have, however, added to positions when the broader market sentiment was down and took quality names down with it. As I told a coworker once when the Internet bubble popped and my portfolio took a 50% haircut: "The goal is to buy low and sell high, not buy low and sell lower." It took 7 years to recover from that, but it did recover and then some. To me that was a bigger lesson than some Black Friday selloff.

---

Yes, the goal is not to "buy low and sell lower".


There is a learning curve when it comes to developing a successful methodology to being an investor.
And your risk/reward ratio is only as good as your ability to execute your methodology.

---

Could not agree more. And there is no one way to do it. Assisting those in their 20s, 50s, and 70s it is more of the measure of safety used, obviously increasing with age. Still buying quality, holding and having the funds to protect in down markets like this, works quite well. Yes, sucking up some bad losses right now while this market seeks a bottom, but confidence is given when discouraged to look at the Dow, S&P or Nasty over 20,30, or 40 years. The escalator does go up with intermittent elevator drops. The % exposed to risk reduces with age (and that is key to buy and hold working).

But market timing or not sitting in quality will kill with the above. Spend time and hold unless a company's fundamentals change significantly. Result, few sales due to good research pre buying.

And not to sound cocky at all, as we are not enjoying the current losses at all, but will all survive at each age. The Youngers (20s) stoking away cash and keeping powder dry(no buys since Dec 2021), the middies (50s) well balanced at 67/33 and concerned approaching retirement but confident, and the olders (70+) with 50/50 safety will comfortably outlive the capital even with the losses.

Also giving all credit to past and present CFPs and RIAs that have assisted us to get where we are. Along the way I developed an intense interest and get tons of "juice" out of the planning for the entire family while still using professionals to do the majority of the work for all of us. Just another way to skin the cat.

OdontoBear66 said:

---

dajo9 said:

---

Diversifying is important. For years I've been kicking myself for buying real estate instead of just the stock market. Well, right now my real estate is the superstar.

---

But then your RE is part of your diversification.

---

That's my point

dajo9 said:

---

OdontoBear66 said:

---

dajo9 said:

---

Diversifying is important. For years I've been kicking myself for buying real estate instead of just the stock market. Well, right now my real estate is the superstar.

---

But then your RE is part of your diversification.

---

That's my point

---

The reason I picked up so quickly is that we have a 50s son who bot RE when he got married in 1994 and it is about 8X now. Crazy, but so. He added to it 4 years ago in Tahoe and we always thought 2nd homes as fun but so-so investments. Wrong. It has doubled. More crazy. I applaud your smarts and it does help when looking at the overall picture. Congrats. Now let the stock market return before the RE market collapses (actually I feel a correction, not a collapse). Haha.

My second boss talking about the current market environment and unchartered territory.
The number of times that the Financial Conditions Index has tightened this much, in the past.

CNBC, May 3rd.

Fed is facing one of the most challenging periods in its history, says Paul Tudor Jones - YouTube

What Paul Jones was saying last June about the notion of transient inflation and how the Fed has been reacting.
And how the commodity markets were perfectly teed up for massive moves to the upside.

Paul Tudor Jones: 'Go all in on inflation trade' if Fed keeps ignoring higher prices - YouTube

I appreciate hearing all the information from what appears to be really smart people on this board. Thank you.

OdontoBear66 said:

---

dajo9 said:

---

OdontoBear66 said:

---

dajo9 said:

---

Diversifying is important. For years I've been kicking myself for buying real estate instead of just the stock market. Well, right now my real estate is the superstar.

---

But then your RE is part of your diversification.

---

That's my point

---

The reason I picked up so quickly is that we have a 50s son who bot RE when he got married in 1994 and it is about 8X now. Crazy, but so. He added to it 4 years ago in Tahoe and we always thought 2nd homes as fun but so-so investments. Wrong. It has doubled. More crazy. I applaud your smarts and it does help when looking at the overall picture. Congrats. Now let the stock market return before the RE market collapses (actually I feel a correction, not a collapse). Haha.

---

Sadly, only some of my real estate is in California

82gradDLSdad said:

---

I appreciate hearing all the information from what appears to be really smart people on this board. Thank you.

---

Just remember, as with the market TV programs, there is a lot of "sound". You must be the filter.

I have always looked at engaging in the stock market as a modified form or gambling (in reverse)...But in the sense that if you do diligent homework & have a degree of patience you will be like "the house". You do not need to win them all, just more than you lose. With it, your capital should grow.

OdontoBear66 said:

---

82gradDLSdad said:

---

I appreciate hearing all the information from what appears to be really smart people on this board. Thank you.

---

Just remember, as with the market TV programs, there is a lot of "sound". You must be the filter.

I have always looked at engaging in the stock market as a modified form or gambling (in reverse)...But in the sense that if you do diligent homework & have a degree of patience you will be like "the house". You do not need to win them all, just more than you lose. With it, your capital should grow.

---

Well, I'm 62 and have already made more money in the market than I ever thought possible. No gamble. No big research. Just have a career, live cheaply and invest. In fact, the more 'homework' I've done the worse my returns. I do view it as investing in the US economy and not a bit like gambling.

DiabloWags said:

---

dimitrig said:

---

5. Focus on the long term

I started investing while I was in high school (Janus Mutual Funds) and I have never sold a position based on what the broader market was doing. I have, however, added to positions when the broader market sentiment was down and took quality names down with it. As I told a coworker once when the Internet bubble popped and my portfolio took a 50% haircut: "The goal is to buy low and sell high, not buy low and sell lower." It took 7 years to recover from that, but it did recover and then some. To me that was a bigger lesson than some Black Friday selloff.

---

Yes, the goal is not to "buy low and sell lower".

I would strongly suggest that what's more important is what you do WITH YOUR LOSERS.
No where in your 5 talking points on investing explains what you do with your losers.

The reason that I bring this up is, is because while you waited for 7 years for your account/portfolio to recover from the Dot-Com collapse, the fact of the matter is that it took 17 years for the S&P 500 Information Technology Index to finally break the record it set back in March 2000. - - - Moreover, a ton of those companies are no longer around.

There is a learning curve when it comes to developing a successful methodology to being an investor.
And your risk/reward ratio is only as good as your ability to execute your methodology.
Figuring out the best methodology for your goals takes time.
It doesnt just happen overnight.

In fact, I would place far more importance on your #2 and "knowing what you own" than your #5.
#5 can literally kill you.

Knowing what you own really should be the relevant question here. In fact, it should be the preeminent question here.

Because if you own a company or companies that arent able to grow and have a management team that can execute, then it doesnt matter how many times you average down and keep buying their shares. You're going to wind up with a substantial portion of capital deployed in a company that isnt going anywhere.

Knowing how to identify your "losers" and what you do with them should be the single biggest component of your investing methodology. It can help you stay in the game and avoid large drawdowns that literally have you "frozen" for years.

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I think it is important to note (as 82gradDLSdad has already) is that you are looking at the peak of the market and then determining how long it took to reach that peak again. That only really matters if you did all of your investing at the peak.

Like with Target, the fact that it dropped so much shouldn't be of a lot of concern to Target shareholders who have owned the stock long enough. I mean even if you just bought in 2019 your investment has still doubled even after the recent downturn.

Now, this might be a good time to reevaluate the company and see if there are some real structural issues underlying the selloff. If there are, this might be a good time to take profits and roll into something else. However, if this is just part of the broader weakness in retail then maybe you add to your position. Quite frankly, if I owned Target (I don't) I might just hold for the moment but not buy more - but that is without really looking at their numbers or anything like I might if I owned it.

Now, you make a good point about identifying losers. Averaging all the way down on a dog is stupid. Even if it's not a dog, how do you know when its best days are behind it? I held both GE and Intel a lot longer than I should have. I didn't lose any money on them (on the contrary!), but they lagged the market a long time and the money could have been better used elsewhere.

The best way to counteract that is by diversifying so that any one stock (or two) doesn't drag your portfolio down with it.

As to when to sell, even well-managed companies can be hurt by competition, deregulation, and other external factors. A big part of when I decide when to sell is if I think I see a better opportunity going forward and I need to raise cash for it. I don't mind being wrong and selling a winner if I replaced it with another (or bigger) winner.

dimitrig said:

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As to when to sell, even well-managed companies can be hurt by competition, deregulation, and other external factors. A big part of when I decide when to sell is if I think I see a better opportunity going forward and I need to raise cash for it. I don't mind being wrong and selling a winner if I replaced it with another (or bigger) winner.

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So you dont look at a company's valuation relative to its peers in order to judge when to sell it?
For example, determining whether the stock is trading at a discount or a premium to the group?
Or on a historical basis to itself?

Your decision is primarily driven by seeing another opportunity going forward?

I'm trying to understand how you'd even go about making that decision in a disciplined manner.

Do you have some sort of a fixed percentage gain in your head that triggers a sell decision, relative to seeing another opportunity going forward?

DiabloWags said:

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dimitrig said:

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As to when to sell, even well-managed companies can be hurt by competition, deregulation, and other external factors. A big part of when I decide when to sell is if I think I see a better opportunity going forward and I need to raise cash for it. I don't mind being wrong and selling a winner if I replaced it with another (or bigger) winner.

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So you dont look at a company's valuation relative to its peers in order to judge when to sell it?
For example, determining whether the stock is trading at a discount or a premium to the group?
Or on a historical basis to itself?

Your decision is primarily driven by seeing another opportunity going forward?

I'm trying to understand how you'd even go about making that decision in a disciplined manner.

Do you have some sort of a fixed percentage gain in your head that triggers a sell decision, relative to seeing another opportunity going forward?

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I never like to suggest words for another, but as I read dimitrig, what he says seems very similar to a momentum strategy used by growth investors suggested by Investors Business Daily. You purchase stocks within a Buy Range and hold until their growth becomes extended (I believe they use 20%), then sell, and use the funds for the next purchase in the Buy Range. It certainly does not work in this Confirmed Downtrend, and you can get burnt badly if not watching closely.

82gradDLSdad said:

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OdontoBear66 said:

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82gradDLSdad said:

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I appreciate hearing all the information from what appears to be really smart people on this board. Thank you.

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Just remember, as with the market TV programs, there is a lot of "sound". You must be the filter.

I have always looked at engaging in the stock market as a modified form or gambling (in reverse)...But in the sense that if you do diligent homework & have a degree of patience you will be like "the house". You do not need to win them all, just more than you lose. With it, your capital should grow.

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Well, I'm 62 and have already made more money in the market than I ever thought possible. No gamble. No big research. Just have a career, live cheaply and invest. In fact, the more 'homework' I've done the worse my returns. I do view it as investing in the US economy and not a bit like gambling.

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A strategy that works for you and it sounds like you have stuck to it with success. Kudos.

OdontoBear66 said:

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82gradDLSdad said:

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OdontoBear66 said:

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82gradDLSdad said:

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I appreciate hearing all the information from what appears to be really smart people on this board. Thank you.

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Just remember, as with the market TV programs, there is a lot of "sound". You must be the filter.

I have always looked at engaging in the stock market as a modified form or gambling (in reverse)...But in the sense that if you do diligent homework & have a degree of patience you will be like "the house". You do not need to win them all, just more than you lose. With it, your capital should grow.

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Well, I'm 62 and have already made more money in the market than I ever thought possible. No gamble. No big research. Just have a career, live cheaply and invest. In fact, the more 'homework' I've done the worse my returns. I do view it as investing in the US economy and not a bit like gambling.

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A strategy that works for you and it sounds like you have stuck to it with success. Kudos.

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Thank you. Wish I could take credit for some sort of special knowledge or skill. Luckily I'm a good direction follower. Credit to my parents.

82gradDLSdad said:

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Thank you. Wish I could take credit for some sort of special knowledge or skill. Luckily I'm a good direction follower. Credit to my parents.

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There is something to be said for the Wall Street slogan, Observe what is happening and assume it will continue.

In other words, the Trend is your friend.

DiabloWags said:

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82gradDLSdad said:

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Thank you. Wish I could take credit for some sort of special knowledge or skill. Luckily I'm a good direction follower. Credit to my parents.

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There is something to be said for the Wall Street slogan, Observe what is happening and assume it will continue.

In other words, the Trend is your friend.

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True but also bull markets are slow and tedious while bear markets are fast (relatively) and furious.

DiabloWags said:

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82gradDLSdad said:

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Thank you. Wish I could take credit for some sort of special knowledge or skill. Luckily I'm a good direction follower. Credit to my parents.

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There is something to be said for the Wall Street slogan, Observe what is happening and assume it will continue.

In other words, the Trend is your friend.

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Except when it isn't.

dajo9 said:

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DiabloWags said:

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82gradDLSdad said:

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Thank you. Wish I could take credit for some sort of special knowledge or skill. Luckily I'm a good direction follower. Credit to my parents.

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There is something to be said for the Wall Street slogan, Observe what is happening and assume it will continue.

In other words, the Trend is your friend.

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True but also bull markets are slow and tedious while bear markets are fast (relatively) and furious.

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Bear markets (compared to Bull markets) are fast and furious on the downside because there is a lack of liquidity.
Yesterday's move was a prime example.

The man, the legend.
PTJ, circa 1985

cbbass1 said:

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DiabloWags said:

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82gradDLSdad said:

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Thank you. Wish I could take credit for some sort of special knowledge or skill. Luckily I'm a good direction follower. Credit to my parents.

---

There is something to be said for the Wall Street slogan, Observe what is happening and assume it will continue.

In other words, the Trend is your friend.

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Except when it isn't.

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The trend is your friend in the financial and commodity markets when you are positioned in the same direction.

A market that is exhibiting higher lows and higher highs is trending higher.
A market that is exhibiting lower lows and lower highs is trending lower.

By observing what is happening, you can define the trend and profit from it.

DiabloWags said:

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dimitrig said:

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As to when to sell, even well-managed companies can be hurt by competition, deregulation, and other external factors. A big part of when I decide when to sell is if I think I see a better opportunity going forward and I need to raise cash for it. I don't mind being wrong and selling a winner if I replaced it with another (or bigger) winner.

---

So you dont look at a company's valuation relative to its peers in order to judge when to sell it?
For example, determining whether the stock is trading at a discount or a premium to the group?
Or on a historical basis to itself?

Your decision is primarily driven by seeing another opportunity going forward?

I'm trying to understand how you'd even go about making that decision in a disciplined manner.

Do you have some sort of a fixed percentage gain in your head that triggers a sell decision, relative to seeing another opportunity going forward?

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I don't use valuation relative to peers. The leaders will often be overvalued compared to peers. It's something to look at for sure, but I don't make decisions based solely (or primarily) on that. Some stocks just have cachet and people buy them over peers that perform just as well or better. It doesn't make any sense, but it happens.

As for whether the stock is trading at a discount or premium relative to itself, sure, but that often has more to do with the broad market.

I do not have a fixed percentage gain that triggers a sell decision. That would lead me to selling the biggest winners and leaving me with dogs. I would call that a horrible methodology.

What I do is follow a basket of stocks I am interested in (and own) and periodically - maybe once or twice a year or when a significant event happens in the market like is happening now - I reevaluate them. If I see one that I don't own which seems more promising than one I do own then I will swap one for the other or sell one and buy more of another. Maybe a stock has been underperforming for some time and an event (like a new CEO) happens that makes me consider dumping it for something else. Sometimes it may have to do with segment of the market, too, like value versus growth or small cap versus large cap.

I don't churn a lot so these are decisions that evolve over months and sometimes years. It's not like I am chasing something shiny all the time, but I am regularly (on the order of quarterly) adding/removing stocks from my watch list.

dimitrig said:

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If I see one that I don't own which seems more promising than one I do own then I will swap one for the other or sell one and buy more of another.

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What does more promising mean?
How do you go about evaluating that in a stock?
I guess I'm trying to figure out what metrics you use.