Cash to Half

As of yesterday, cash is up to around 50% of the entire portfolio.

I know I mentioned on Monday that it was at around 30%. I’ve been eyeballing how strong the bounce from the bottom of the recent correction has been. I guess I’m not feeling as great about any sort of continued melt up. Upon reflection, I think I’ve been trading in and out for a little while because I don’t believe deep down the narrative that everything is rosy and the market will continue to march higher and higher. So I’ll sit in cash, earning about 0.9% interest and wait.

Stocks are expensive relative to history. The 10 year US Treasury continues to go up. I will be cautious. If I’m completely wrong, as I said 3 years ago, I will just index everything to the total stock market and forget about playing fund manager.

Only advice I have is to do as I say (index, DRIP, and forget) and not as I do (what I’ve just written about).

Market Correction February 2018

So I wrote this super long, rambling post exceeding 1000 words, listing all sorts of various trades and fairly esoteric math that only I would probably understand about opportunity cost gains and losses in the portfolio. I realized at the end of it, I didn’t really want to hit that publish button. So I think the compromise is to keep this as simple as possible.

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Using the Earnings Yield as a Simple Valuation Screening Technique

One of the reasons posts have been few and far between since the fall is that I have been transitioning the cash flow from debt repayment to savings and investments. If I wasn’t that interested in the art and science of investing, I would have picked 2 Vanguard ETFs, done regular dollar cost averaging over the next umpteen years, and called it a day (this is something I think most people should do as they will have no further interest in analyzing investments). However, I have an obsessive level of interest and curiosity in businesses and want to figure out the most optimal way to invest in businesses. Thus, a lot of time was (and still is) spent gaining knowledge. Let’s talk about one metric I use to screen potential investments: the earnings yield.

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How Intelligence Increases Wipe Out Risk

gt advanced technologies abcChills ran down my spine. I had just finished reading about investors losing their entire life savings. These people had doubled down and wagered everything on a single company. A single stock. And they lost everything. This is a fascinating read. As I sifted through the carcass of an online trading forum where this drama played out over 500+ pages, I couldn’t help but notice the story and the lessons that unfolded as the days went by. The company was GT Advanced Technologies.

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