Welcome. The content below is free to the public. It might be worth what you are paying for it. Having studied economics and being in finance for over two decades, I have learned that only one thing is certain - that almost nothing is certain. As we endeavor to come up with our best analysis of the world around us, the opportunities and risks, we have to try to overcome a myriad of issues including our own ignorance, biases and emotions. What follows are my attempts to overcome those obstacles. Welcome to my view - publishing Monday and Friday afternoons.
The middle two quarters of the year were rough for me. Not only did I get into energy after it had declined 30-50% which was just in time to see it drop another 30-50%, but my hedges for what has happened August and September, expired in June. Arrrghhh. Being right isn't always good enough, sometimes, timing does matter. Luckily, most of my energy investments are stock, so the calendar is on my side.
I am still heavy cash, but less so after the purchases listed in the past month. If you are still sitting 25-50% cash, you should be thinking about a scaling in approach. Don't delude yourself into thinking that you can catch absolute bottoms. You can't. Nobody can. Not with any regularity anyway. You'll catch some bottoms, others you will miss. That's life.
This week I finally declared "The Bear Market has Begun" on MarketWatch. If you are sitting 25% to 50% cash as I suggested repeatedly earlier this year, even with haircuts on the energy stocks we've accumulated, you are sitting in a good position to buy great companies at panic pricing in the not too distant future. As we accumulate, remember, it's not about catching the bottoms, it's about investing below the mean pricing we expect over a full cycle.
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