UPDATE: Saturday morning and the weekly totals are in: DJI -14%, NASDAQ -13%, S&P -13%.
always keeps cash–often as high as 30%. In troubled times a high cash position provides protection against declines. The first time we horded cash we began to gather the notion that “Cash is king.” And then we built more. After being deep in the hole on ETSY for months, we sold $85.00 from flat on the 11% spike that occurred during the first five minuets of after-hours trading when they reported on Wednesday. That pushed our cash position up to 39%.
was busy buying all week, in small and repeated bites. Everyday we bought as prices improved. We built new positions in Alteryx and Advanced Micro Devices, and snatched more Kirkland Lake Gold as it dropped mid-week. Along the way we bought Tesla small. Trex and Dominion Energy came on Friday. Of all these, we hold a full position only in KL. We reserved room to add to any of the rest, if prices continue to fall.
may be the fugliest dollar you’ll ever lose–oops, make. No one stands at the market door with a hug and a tourniquet. When all you can hear is your heart, and all you can see is investors headed for the exits, stop. Most people don’t run with their arms full. That means they’re leaving all the good stuff behind. That’s when you grin, breathe, check your list, and load the truck straight off the dock with the good stuff you’ve been watching for months. What does Buffet have to say about this market plunge?
“It makes no difference in our investments. There’s always going to be some news, good or bad, every day. If somebody came and told me that the global growth rate was going to be down 1% instead of 1/10th of a percent, I’d still buy stocks if I liked the price, and I like prices better today them I did last Friday.”–Warren Buffet.
If investing were easy everyone would be doing it. You make money when you buy, and you buy when the market is hated. That’s why you do the homework regularly. Market drops are sales, but without the advertising.
Investors are again dumping the good stuff. The good stuff is being pounded right along with the junk. Think IT. Whadda you love? Whadda you really know cold? Look at those, and their prices. We are and we’ve been buying little bits every day. We built cash and even after buying over the last three days, we yet are 38% cash. We intend to remain cash-heavy, likely no lower than 30%.
we repeat it? You will hear it, today. Thursday was the worse single point drop in market history. But the market will be open again today, and savvy tough investors will make money. This week is called seasoning. Live through it and move on. In time it will rank as a “I remember when…”
We’ve been buying down everyday–AYX, AMD, TSLA, KL. This fall’s not over. Go slow, bite small. Think secular growth–the stories you know. Again, this fall’s not over. Go slowly and buy in widening scales.
You make money when you buy, not sell. The selling bit is the cashing in. In order to buy low and sell high, the market must periodically drop. That’s called price creation, for those still thinking. If investing were easy everybody’d be doin’ it. The time to buy is when the market’s viscerally hated for its’ evil ways. That’s now. Good luck and keep investing.
Jam of the Day
“Quitters never Win.”