Whisper9999
Recycles dryer sheets
- Joined
- Jul 5, 2004
- Messages
- 173
I'm up 17% in my cash broker account and up 7.3% in my IRA. (I invest short term in only the best of best NASDAQ stocks.)
Here is how I track my net worth, and I do it
compulsively. I reach into the nearest wastebasket and find a piece of paper without printing/writing on one side. It should be at least the size if a No. 10 envelope. Then, I find a working pen or pencil. I list all assets and subtract
any liabilities. My net worth appears.
I don't save it anywhere cause I can do it again
anytime in 5 minutes
BTW, I continue to invest in long term bonds
including some junk, but this is all "forever" money.
I hate watching the NAV bounce around as interest rates change, but I need the income and CDs/MMs
ain't makin' it for me these days.
John Galt
JG, do yourself a favor and be careful with junk or low investment grade bonds. By all indications, these assets are historically overvalued, and sorely due for a correction. If you are on the wrong end of it, you will be sorry. Find something like a high yield CD instead and wait for junk yields to get more attractive.
Right. Just look at a chart of LQD. It's had quite a rise and is now flattening.
But there is some potentially good news: the economy is doing well, default rates are low (at least the last time I read about it) and corporate profits are pretty solid. This historically has been good for corporate bonds in general.
But I would definitely have my finger on the trigger and would pull it at any sign of a correction.
LQD is actually composed of investment grade corporates, not junk.
Hi Whisper. A couple of comments. First you meant to say "yielding less than 4% ABOVE the corporate yield"? (By corporate I assume you mean investment grade). Right?
Two ways you can be saved if the junk starts to
head south. Pick the right time to get out, or
(in the absense of default) hold to maturity.
John Galt
I am answering Whisper's queries (a bit late) about
my "trigger points" and "exit strategy" for my junk
bonds. Whisper, I do not get that sophisticated, but here is how I am looking at it. If CD rates come back
(at least 1% up on 5 year term), I would shift SOME
junk money into CDs, UNLESS my NAV had dropped too
far for me to stomach. In that case, I revert to the "forever" money idea and just cash my interest checks until the bonds mature or I expire, whichever comes first. The tricky part for me was deciding how much
"forever money" I needed. I have that pretty well fixed
now, so if the bond values plummet but I still get my
monthly checks, I should be fine. I tell you though,
it took some conversion in my thinking to accept that
my NAV could bounce around. I was used to CDs
where what you put in is always there. Couldn't stand
the puny rates though, and that's when I made the great leap into junk/near junk. So far it's been fine.
John Galt
Bob,
If one wanted a classic case study of the ''Madness of Crowds'' along with an embodiment of Ben/Warren's "Mr. Market'' in Manic Depression than HK/Asia after SARS was it. The most egregiously underpriced but solid global companies could be bought - I took a very deep breath and repeated the Buffett mantra of ''Be greedy when others are fearful''. Got to keep an eye on the pendulum swinging the other way though.
Simon
I posted this before so some poetic license please
I have my inflation
protection in real estate (bought right/good location/positive cash flow) and if I lost 100% of my bond money I still would not have to go back to work.
John Galt
John, I cannot remember if you have disclosed your net worth. You have said that it is low. Yet you speak of having direct investments in real estate beyond your own house. In fact, I believe you once referred to owning an entire island.
Direct real estate investment in today's market, let alone owning islands, is not something that one usually associates with modest net worth.
What am I missing?
Mikey
Mikey:
Realize you were waiting for an answer for John Galt, but while that's forthcoming, I just wanted to make a comment.
What you are missing is a sense of humor, re: John G.
Anybody that has spent time on this board, that is not brain-dead, has been able to figure out that John G has flights of fantasy.
That being said, he comes up with sometimes entertaining posts, and I will admit to admiring his spirit.
No harm, no foul.
Regards, Jarhead
Jarhead--LOL John generally goes beyond my ability to suspend disbelief. But when I saw people asking him questions, and treating this whole odd scenario as if there might be some substance to it I got confused. I found myself wanting to own islands, wheel and deal in real estate, and have un-noticed treasures in my garage. All I have in my garage is mouse droppings, and they are easy to notice.
And have all this while paying no taxes, having no worries beyond the bubbles in my beer, and no book-keeping beyond a few old envelopes fished out of the trash.
After he explains all this to me, I also need his coaching to learn how to get a woman to go out to work, and still come home at night.
I guess some guys have all the luck.
Mikey
Based on all this, is JG the worst troll on the message board?
Or rather, the best?