Warren Buffett and Charlie Munger have famously said that you should not diversify. They have also said that diversification should be called di-worse-ification. Other people have said they didn’t mean it. Well, they kind of did. The Right Way To Think Of Diversification You should diversify to prevent “actual loss” rather than “market loss”. Actual… Read More »
Here is why you don’t want to generally save cash to deal with a turbulent market. Or at least ideas you should consider as you decide what to do with your savings and investments. Your general return on cash Cash is probably making around 4% in a really good savings account. Which ain’t much. Inflation… Read More »
Crypto, bipto, bopto. Etherium, you know. There are a lot of them though. The most popular of these is Bitcoin that has been around the longest I believe. If I’m wrong you all can’t tell me anyway. How the heck do you make money from crypto? Today various cryptos have a given value. In the… Read More »
There are a lot of different funds, i.e. ETFs, that trade in a weird way. For instance NVDY makes money by selling options on NVDA… or whatever they do. I’ve never bought NVDY but if I did, I would really understand it. And I guess that’s the point. If you choose to buy any kind… Read More »
I am not a “trader”, I am an “investor” so typically I buy and hold individual stocks. Let’s say though that I invest in QQQ (Nasdaq 100) and over 10 years it averages 18% per year. If I invest in another ETF that also averages 18%, what is my total return? 18%. Why? Because ta… Read More »
Let’s talk a little about diversification. Do you need to diversify to reduce risk or reduce volatility? Let’s talk about risk. Negative risk implies you lose actual money, not just market value. If you own tons of just one stock, you have a real risk that you will lose all of your money, in a… Read More »
I wanted to update something I said before, that you do not intentionally diversify. Personally, I do not diversify among sectors but I do diversify among business models. I still strive to pick the 10 best companies I can, but I try to pick the best of breed company based on business model. For instance,… Read More »
I kept my cash bar pretty high over the last 3 or 4 months, but maybe you have been more daring. As we head into record territory yet again, maybe it is a good time to look at your cash position and decide whether to beef it up. Cash in this case is uninvested cash… Read More »
Here is something that Jim Cramer on CNBC said last week: “I’m telling you to have some discipline. I expect this market to have a near-term bounce, and discipline means you should sell something into that rebound…” (CNBC) Honestly, this assumes that the market will resume its selloff, which it very well could. But what… Read More »
I read an article on Seeking Alpha this week from 2016 which stated that holding 50% in UPRO and 50% in TMF and rebalancing weekly outperforms the best performing stock in the S&P 500. Over the past year, I believe this performance would have been about a 49% gain, where the S&P had a small… Read More »