Hello boys and girls. My topic this morning comes from
'The Bob and Tom Show' where I get most of my news
on world events, along with the Rush LImbaugh Program and MAD
Magazine. The complete quote is "You can drink an
ugly girl pretty, but you can't drink a fat girl thin."
This is a metaphor for my investment philosophy, which
the regulars are all too familiar with. However, for you Newbies.....
I own bonds, mostly long term. No stocks of any kind
except in my own PHC (personal holding company)
which does not count. I understand all of the arguments
pro and con, Zipper's questioning of my IQ notwithstanding. Stocks would make a lot more sense
to me if I was 40 instead of 60, but I still wouldn't hold them if I was planning to ER. What I value most is
predictability. Anything can effect stock values/dividend
yield. Wars, famine, good laws, bad laws,
plagues, good news, bad news, or just plain old herd
mentality. The thing is (absent default) I will keep getting my 7% every month, no matter what else is going on. True, as time goes by that 7% will be worth less, and the NAV may drop. But if I hold to maturity
there is the money, every month. Also, it is possible
that the stock market may plunge and stay there for
decades, or maybe you will still be getting your 3%
10 years from now, while I still am getting my 7%.
If inflation goes nuts, I either cut back my spending
or sell real estate. No problem.
So stocks are the "fat girl" sitting
in The John Galt Bar. Someone will ask her to dance,
but it won't be me.