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Old 11-04-2018, 09:04 AM   #1
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Media squawking about Buffet drowning in cash. But can't find anything cheap to buy. So he takes 1% of his cash & buys his own cooking. So what's the takeaway here? My conclusion is keep your cash dry for now.
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Old 11-04-2018, 09:12 AM   #2
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Media squawking about Buffet drowning in cash. But can't find anything cheap to buy. So he takes 1% of his cash & buys his own cooking. So what's the takeaway here? My conclusion is keep your cash dry for now.
His advice in the past for most investors is to buy and hold low cost index funds.

I never try to be Buffet or play tennis against the Williams sisters.

VW
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Old 11-04-2018, 09:21 AM   #3
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I agree. Just trying to get a sense of how expensive he thinks stocks are. Without asking him directly. He might be buying again now.
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Old 11-04-2018, 10:47 AM   #4
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I agree. Just trying to get a sense of how expensive he thinks stocks are. Without asking him directly. He might be buying again now.
Buffett has bought a lot of Apple stock recently but no other huge purchases. The "Buffett Indicator" of how expensive stocks are is calculated by:

Total Stock Market Capitalization / GDP

Currently, that indicator is VERY high, on par with the dotcom bubble days.

I love John Bogle and wish I could simply relax and hold my index funds forever. But I've become convinced we are in yet another equity bubble and I've pretty recently sold off most of my equities.
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Old 11-04-2018, 12:56 PM   #5
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I don't listen to Buffett much these days. He's got a thing for Becky Quick with CNBC - she is one of the very few folks he gives interviews with, and he does it fairly often. If you notice him at his annual meeting or whenever reporters are surrounding him, Becky is always within arm length distance.

Now, for all of 2018 he has been saying that stocks are not expensive. I've seen him say it as recently as a couple months ago...in an interview with Becky.

It may be the case that he isn't able to find anything "cheap" which is viable for him to buy because of the necessity for it to be large cap with sufficient liquidity for him to take a position. He's not looking to put $10 million or $100 million into a company. He needs to put at least a few hundred million or billions to even register.
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Old 11-04-2018, 01:32 PM   #6
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Originally Posted by RenoJay View Post
Buffett has bought a lot of Apple stock recently but no other huge purchases. The "Buffett Indicator" of how expensive stocks are is calculated by:

Total Stock Market Capitalization / GDP

Currently, that indicator is VERY high, on par with the dotcom bubble days.

I love John Bogle and wish I could simply relax and hold my index funds forever. But I've become convinced we are in yet another equity bubble and I've pretty recently sold off most of my equities.
I hope you don't have the same problem as this info represents!!

Growth of 10,000 invested Jan 1 1980 for all days--- 708,143
Missing 5 best days------------------------------------- 458,476
Missing 10 best days------------------------------------ 381,484
Missing 30 best days------------------------------------ 135,226
Missing 50 best days------------------------------------ 62,342

Doesn't take many days out of the market to lose big.
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Old 11-04-2018, 03:10 PM   #7
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I hope you don't have the same problem as this info represents!!

Growth of 10,000 invested Jan 1 1980 for all days--- 708,143
Missing 5 best days------------------------------------- 458,476
Missing 10 best days------------------------------------ 381,484
Missing 30 best days------------------------------------ 135,226
Missing 50 best days------------------------------------ 62,342

Doesn't take many days out of the market to lose big.


Iím well aware of those stats and theyíre misleading because missing the down days saves you a bunch which mostly offsets the good days. I more or less skipped investing during the dotcom bubble (I only had maybe 20% of my net worth in equities) and I missed a ton of great days in 1999. Didnít bother me a bit because I had the chance (and took it) to buy into the market cheaper a couple years later. My point is that overall valuation matters in the long run and even though what Iím doing now is evil market timing, I have enough conviction in my thesis to wait patiently on the sidelines for a market that is more fairly valued than todayís. And when the market was bottoming in 2009, I went 86% in equities meaning Iím not a perma-bear. Wishing the best to those who disagree...time will prove one side or the other to be correct.
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Old 11-04-2018, 03:38 PM   #8
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I don't listen to Buffett much these days. He's got a thing for Becky Quick with CNBC - she is one of the very few folks he gives interviews with, and he does it fairly often. If you notice him at his annual meeting or whenever reporters are surrounding him, Becky is always within arm length distance...
Can you blame him though? Besides, he only looks and talks. Right?

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... It may be the case that he isn't able to find anything "cheap" which is viable for him to buy because of the necessity for it to be large cap with sufficient liquidity for him to take a position. He's not looking to put $10 million or $100 million into a company. He needs to put at least a few hundred million or billions to even register.
Yes. It's the same problem with large mutual funds. The managers of large MFs can no longer invest in mid-cap or small-cap companies even if they spot one. They are limited to picking among the S&P 500. Might as well go index.
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Old 11-04-2018, 04:11 PM   #9
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Iím well aware of those stats and theyíre misleading because missing the down days saves you a bunch which mostly offsets the good days. I more or less skipped investing during the dotcom bubble (I only had maybe 20% of my net worth in equities) and I missed a ton of great days in 1999. Didnít bother me a bit because I had the chance (and took it) to buy into the market cheaper a couple years later. My point is that overall valuation matters in the long run and even though what Iím doing now is evil market timing, I have enough conviction in my thesis to wait patiently on the sidelines for a market that is more fairly valued than todayís. And when the market was bottoming in 2009, I went 86% in equities meaning Iím not a perma-bear. Wishing the best to those who disagree...time will prove one side or the other to be correct.
You should start your own letter and make some money with your timing!

Time has already proven one of us to be correct in the past, but maybe not in the future.
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Old 11-09-2018, 10:14 AM   #10
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I don't think it's so much that he like Becky... it's that he hates Joe Kernan. Or at least that's the way I interpret it! (Maybe because I hate him too??)
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Old 11-09-2018, 10:15 AM   #11
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Did that wrong. Meant to include the quote about Warren Buffett liking Becky Quick.
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Old 11-09-2018, 10:20 AM   #12
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Did that wrong. Meant to include the quote about Warren Buffett liking Becky Quick.
The edit button works for about 6 hours after you post...
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Old 11-09-2018, 10:38 AM   #13
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Originally Posted by RenoJay View Post
...

Total Stock Market Capitalization / GDP

...

Buffett is Buffett, to be considered carefully but he(and Bogle) have always been very home-country oriented. As a long-term indicator I think this calculation is flawed because the GDP that US companies serve is increasingly overseas. IIRC, something like 40 or 45% of the S&P 500 sales are now outside the US. Tom Friedman's "Flat World" IOW. So the comparability of the calculation today to the same calculation of 20 years ago is poor.
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Old 11-09-2018, 07:48 PM   #14
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...I've become convinced we are in yet another equity bubble and I've pretty recently sold off most of my equities.
We are most likely in an equity bubble, IMHO. Equities may be overvalued, but to me, they're like real estate. They're worth exactly what you buy or sell them for.

In some towns with depressed economies, a house is worth the sum of the land, the materials, and the labor. Nothing more, and sometimes less. But in popular urban areas, houses can be worth many times the sum of those.

Consider this. Every two weeks, people get their paycheck. They have their 401(k) or IRA contribution withheld. They buy stocks or mutual funds no matter what the market condition. My thesis is that since 401(k) investers buy no matter what, the market will continue to increase in value, beyond traditional P/E ratios, or whatever measure you wish to use. It's becoming more and more like Bitcoin. The value has less and less basis in reality. See Cramer's rant about the effect of ETFs in this week's article.

With market timing, either you'll be right, wrong, or partly right. Almost always, you'll be partly right, never being able to pick the perfect exit and entry points.

I had a friend who used to day trade, making tons of money. He used to make trades so large, he 'moved the market'. After winning for quite some time, he started losing...until he lost everything and had to consider going back to work!
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Old 11-09-2018, 08:49 PM   #15
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Becky who

i notice Buffett because his views make some sense ( not always prefect for me , but a good place to reject or adapt from if needed )

Bogle has his pluses but i might dabble in an index that is equal-weighed next crash

( i already hold some market-weighted index funds , and plan to keep those _
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Old 11-09-2018, 11:10 PM   #16
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Becky who
Becky Quick of CNBC. See video link below. She is apparently Buffett's favorite reporter.

It's been a few years since I watched CNBC, and Becky has aged a bit (46 now).

https://www.cnbc.com/video/2018/05/0...t-archive.html
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Old 11-10-2018, 08:54 AM   #17
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You should start your own letter and make some money with your timing!
To start a newsletter, you buy a list and send half of them a forecast of gloom and doom. The other half gets light and airy. Then you send the half that think you are a prognosticator an offer to sign up.
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Old 11-10-2018, 08:57 AM   #18
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Becky Quick of CNBC. See video link below. She is apparently Buffett's favorite reporter.

It's been a few years since I watched CNBC, and Becky has aged a bit (46 now).

https://www.cnbc.com/video/2018/05/0...t-archive.html
Since I stopped watching CNBC, I get my Quick fix by recording "On the money" at 6:30 am Sunday on NBC.
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