Going to 100% cash

[Dawg52]

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Originally Posted by TromboneAl Right. I hesitated to post that, and hoped the that smiley would indicate the good-natured ribbing that was intended.

That's the way I took it.

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Originally Posted by shotgunner Dex what does FIRECalc say about your 100% cash position vs. expected/needed longevity?

I don't think he plans to be all cash long haul.

Originally Posted by dex
Mentally, I am prepared to be in cash until the end of the year. I'll be watching along the way for an entry point.



For me, I'm somewhat of a dirty market time too. I did a poor job of it when the market crashed a couple of years ago. I rode it down and rode it back up(with the help of med's) and sold off 1/2 of my stocks when the rebound approached 10k. A little early but no complaints. I reshuffled some things and amazingly, I'm almost back to where I was pre-crash. Of course it helps to have a very low w/d rate.

I'm looking to trim some more. Probably a little this quarter.

[dex]

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Originally Posted by shotgunner Dex what does FIRECalc say about your 100% cash position vs. expected/needed longevity?

This is not a lifetime move. Even if it was I have 7 years until SS and a small pension, my investments only have to fill in the gap.
There will come another secular bull market when you can leave your money in equities for 10-18yrs like previous ones. I do suggest people expand their investment choices to foreign currencies, foreign stocks, and foreign bonds as that is where the greater growth will be in the future.

[haha]

I would not post my moves, or should I be deluded enough to think I knew what would happen I would not share this as advice. Way too easy to appear wrong, whether you are wrong or right eventually, or whether there even is a wrong or right. Once you have gone public you are in a sense fair game, and although members here are as sweet as Mom's apple pie, I'd just as soon walk in the shadows. I talk over some moves (before acting) with my brother, who has a similar mentality, though he is more risk averse.

I do adhere to a method which is basically varying asset allocation depending on PE10 or Tobin's Q valuations. I don't pay any attention to any other valuations, athough there may be others as good as these. But this method only has promise if in fact markets are mean reverting, and that is a long term phenomenon if it exists at all lately. Every day and every years conditions are different. So this could be an invalid strategy.

Investing is for money, not for social approval, and I am almost sure that seeking social approval, even in very small degree, is apt to be negative for the main goal of making money.

As far as whether after the fact postings are to be distrusted, I kind of doubt it. I reflexively distrust anything put forth on this board or elsewhere that is linked to a selling scheme by the poster, no matter how small the stakes are claimed to be, or no matter how much the poster tries to make it appear that s/he is actually performing a public service. If I had something to sell, I would do like every other person marketing, tell partial truths if forced too, otherwise "keep it happy".

But the only payoff to sugarcoating our performance reports would be mixed at best. Many will distrust the reports anyway if they seem too positive. I remember the recent crash. Pretty much everyone's investment schemes were blowing up, mine were more exposed than most because of a too heavy equity allocation. As far as I could tell, people were honestly posting about how badly they were being mauled.

Just before the climax of the crash I noticed that Genworth common was being heavily bought by important insiders at that firm. I bought enough to matter, but not enough to get killed. (With penny stocks, this is not hard.) But I had a meeting scheduled with my Fido rep to discuss Roth conversions, and he asked me about the Genworth in my TIRA. So in the course of explaining my thoughts to him it looked like just what it was, a rank speculation, based only of what insiders were doing. But as he pointed out, insiders had been getting blown up all through the crash, why would I trust this?

He was correct, but his comments (not really criticism) led me to forget that I knew it as a spec going in, so re-calling it a spec shouln't haved invalidated the suitability/or unsuitablilty of the move. It was a good move or a bad move on its own terms. I sold for what turned out to be a very small gain compared to where it got to because this encounter moved me off my center. I should let my all or none bets ride, as that was the plan. Sometimes they will win, sometimes they will lose but it is not helpful to change based on what someone else says, unless perhaps that someone made a meaningful fortune solely by investing his own money.

IMO, only for practitioners of non market sensitive asset allocation should investing be a social activity. For them, I suppose it could be helpful, the old "Keep the faith" idea. For others, brag after the fact if you want to, confess errors after the fact if you want to- but publishing a log of your moves, either here or elsewhere will expose you to criticism and/or jokes that may hurt emotionally and also hurt your performance. It is different if you have an honest need or desire for help at arriving at a decision before the fact, or perhaps to sell or hold. Certain people who got absolutely killed in the crash may have been helped by some ordinary be "be safer and diversify" advice such as the kind that is rightly given out on this board.

Ha

[samclem]

I am glad dex posted his move in advance--I think we've all (including dex) had fun with it, and still are. We had a chance to re-touch on the active vs fixed allocation debate (and even had a bizarre diversion whereby "fixed" was re-defined as "active" if the participant ever re-balanced).

I think most here are posting for fun and to learn something. But I agree that anyone with a fragile ego who comes here for validation would be best to avoid making predictions. For the rest--game on!

[haha]

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Originally Posted by samclem But I agree that anyone with a fragile ego who comes here for validation would be best to avoid making predictions. For the rest--game on!

I think what I am referring to has little or nothing to do with supposed ego strength. It has more to do with wasting time and mental-emotional bandwidth debating things that many investors will long ago have settled in their minds. Have you seen how long some of these absurd debates can go on? In fact, here I am posting again on this topic!

As regards validation, look carefully at many of the threads, especially during stressful times. One of their main functions is to validate or find agreement with a course of action the poster or OP is taking.

Why else so many threads about how ridiculous and wasteful and perhaps morally questionable the unwashed not-us are?

Ha

[Dawg52]

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Originally Posted by haha I think what I am referring to has little or nothing to do with supposed ego strength. It has more to do with wasting time and mental-emotional bandwidth debating things that many investors will long ago have settled in their minds. Have you seen how long some of these absurd debates can go on? In fact, here I am posting again on this topic! As regards validation, look carefully at many of the threads, especially during stressful times. One of their main functions is to validate or find agreement with a course of action the poster or OP is taking. Why else so many threads about how ridiculous and wasteful and perhaps morally questionable the unwashed not-us are? Ha

I belong to a labrador retriever forum and you should see the endless debates on nutrition. You wouldn't believe how ridiculous some of those threads are concerning dog food. Basically as you described.

That is the nature of most forums. People like to validate what they do. I'm guilty as well. But I will do better.

[Purron]

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Originally Posted by haha Sometimes they will win, sometimes they will lose but it is not helpful to change based on what someone else says, unless perhaps that someone made a meaningful fortune solely by investing his own money. Ha

So true Ha. Kenny said it true. "Got to know when to fold 'em"....

http://www.youtube.com/watch?v=kn481KcjvMo