NFTRH 717, out now

NFTRH 717, out now.

nftrh 717

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This Post Has 10 Comments

  1. MikeC

    Since I can only successfully comment to public postings, (I will not discuss specific details in the PDF).

    I am curious for any responses on how you all invest money. I used to be a buy and hold person, except when the market hit bottoms (2000 and 2009) when I of course was really good at freaking and getting out right near the bottoms.

    From 2014 to end of 2021 I was a Permanent Portfolio guy, 25% each stocks, cash, long bonds and gold. A few good years, but I was seeing the writing on the walls for bond and am currently 72% cash/i-bonds/SHV, 19% gold and 9% stocks.

    Had a good run in Jan to March 2022 selling puts, until the market started down. Decent risk for little return if I really think about it.
    I have been reading many books (and subbed nftrh). I have looked at various TA methods between April and now, and I don’t know if it is either the flipping a coin feeling I get or just not comfortable with shorter term trading, but TA doesn’t sit well with me except maybe the most basic of looking at MAs. I understand it could work because it’s possibly self fulfilling.

    Lately I have been reading Ben Graham and Buffett and other “value” type gurus, and that “feels” right — buy low/distressed stocks that are otherwise great companies.

    However, on that thought, since we’ve had a good bump here for the past month and a half, a good portion of me wants to wait for a significant downturn before getting heavily back in. But always in the back of my mind, though, is the FOMO — that there won’t be a pullback and we just keep on going up. I know some guys who have been in cash since 2011 waiting for a crash. I don’t want to be that guy!

    And always waiting for that other damn shoe to drop with the Fed.

    Part of me just wants to screen for 20 value stocks with low P/E, dividends, good EPS growth, Return on Equity, low debt, etc., make my bets and forget about the whole damn market for 10 years until I retire and see where it’s at.

    If I did that 33 years ago I would be in fine shape.

    Thanks for reading, and hopefully giving me your two cents.

    1. Gary

      Hi Michael, not sure if you’ll get many responses on this post, which is just a promo for NFTRH 717. Were I a subscriber to NFTRH I would not be reading it. I will inquire of WP about why another WP property owner cannot comment on protected posts to this site.

      But as an investor and to answer your question my overriding goal is to invest not as a day trader and not as a long-term holder but instead as a rider of the prominent cycles. For example, the 2020 crash was a sentiment buy that morphed into an inflation cycle buy (w/ different asset classes being the targets). Then 2021 was a grinding transition to this thing we have now, which is a major interruption (at least) in inflation. Now, we have the mid-summer sentiment relief thing, which is bringing in the FOMOs.

      The herds run with what they see in real time and they are always late to the cycle changes because they don’t have tools or the inclination to look ahead. I believe that a routinely over-stimulated market (both ways) by the Fed only adds to the chaos and confusion. No wonder so many just buy, hold and hope for the best. To this point, the ‘best’ has always come back around sooner or later to bail out casino patrons.

      But what happens when the next positive cycle takes an inconveniently long time to arrive? Hence, cycle management rather than eternal holding for me.

      1. Gary

        “Hence, cycle management rather than eternal holding for me.”… also rather than eternal cash, which the 2011 refugees you mentioned are well acquainted with.

  2. MikeC

    Another thing I have been tossing around in my head as I look for value — value vs. risk is paramount.

    The goal in selecting a value stock is one that has been beaten down but still offers good prospects because business conditions are still good and with a good chance of beating the overall market.

    But it is still a single stock holding, easily subject to the latest good or bad press release or earnings report creating much wilder swings than a basket would.

    While I spent the weekend researching and screening for value stocks, this morning I am asking myself “why?”

    Why not just buy ETFs of various sectors like XLP, XLI, XME, XLK, etc? And maybe dedicate a bit of “risk/play” money to individual stocks?

    In different timeframes, all the “X” ETFs have beaten SPY. Or gotten beaten by SPY

    I am leaning toward some subset of ETFs, with the majority in SPY/QQQ, and maybe looking to actively trade the subset a bit more to take advantage of wider swings.

    This has been an interesting mental effort for the past few weeks.

  3. MikeC

    Hence, cycle management rather than eternal holding for me.

    Yes, exactly. Thanks.

  4. Bart

    Is buy and hold a thing of the past? Good question. I think it is at least partly true. Buy and hold is always based more on fundamental than technical analysis. And I think it really helps if fundamentals are favorable. Very few of us will buy and hold a short for years. And the reality is that fundamentals have not been that great the past 20 years. At least not in comparison with the second half of the 20th century, when buy and hold was more or less the norm. In addition to worsening fundamentals, I think the increased volatility makes buy and hold more difficult from a mental perspective. This increased volatility comes from high frequency trading machines and central banks that think we can infinitely borrow demand from the future (resulting in a more violent boom bust cycle). That being said, I do think we will get a 2 year up cycle in pm’s. I plan to trade in and out around a core position.

    1. MikeC

      Thanks. I am trying to figure out if I give any advice to my older daughter, who just graduated and is starting her first real job tomorrow. If I had to pick one position right now, it would be to max out your 401k, put 100% into an All Market type fund, and literally do not look at it for the next 40 years.

      She has no interest in actively managing any investment, at least not yet. And God help me if I ever tell her to own gold, other than a couple coins for fun…!

      1. Gary

        Gold is so misunderstood, that it may be time for a review. The damn gold bugs have humped it so hard, complete with conspiracy ghost stories that I don’t think many people have a recall about what gold actually is, which is stability. IT’S NOT A PLAY. So why do people impose that upon it? It’s not about performance as with paper assets.

        I think I will write an article this week if I have time.

      2. Bart

        If you want to buy an asset and not look at it for 40 years, then the SM is probably a better proposition than pm’s. But I would not be in a hurry now…. As this bear market will likely last a bit longer (the average stock market bear lasts 2 years…).

  5. MikeC

    It took me many years (many years!) to realize gold is security, peace of mind and insurance, and not a trading vehicle, at least not mainly. I do still want to make a decent return on GLD when it gets beaten down, but I do not expect a $5000 or $10000 with my physical anytime soon. That will just be passed along.

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