Gyroscopic Investing

NASDAQ has roughly doubled since March 20, 2020. Shiller PE is 35 -- among the highest in history. Gamestop is up 7-fold in two weeks. The signs of speculative excess are everywhere. And so I think we are due for a big correction, probably within the next few weeks. Of course those of us with a PP are well-positioned to weather even the deepest bear market in stocks. I'll rebalance, but otherwise am standing pat.

What investors forget is that each day we keep our money in play we actually are buying in at the current prices ....

If markets fall and you are down 25k , you are down 25k regardless if new money or old money.

So many times you see investors say they won’t buy at such lofty levels yet that is exactly what we all do in effect each day we recommit our money

mathjak107 wrote: ↑Wed Jan 27, 2021 8:03 am What investors forget is that each day we keep our money in play we actually are buying in at the current prices ....

If markets fall and you are down 25k , you are down 25k regardless if new money or old money.

So many times you see investors say they won’t buy at such lofty levels yet that is exactly what we all do in effect each day we recommit our money

In my case as a taxable investor, the calculus includes the huge tax cost of selling. This changes the uncertainty model for me.

I never ever let the tax tail wag the tax dog

mathjak107 wrote: ↑Wed Jan 27, 2021 10:17 am I never ever let the tax tail wag the tax dog

Perspective might depend on the number of digits involved.

Well I have multiple 7 figure portfolios, half of which are in my taxable accounts ...I never make decisions based on taxes ...you can can watch gains evaporate over a tax bill that is pale in comparison

I rebalanced out of stocks on Monday.

It seemed like the right thing to do, given the frothy activity in the equity markets. There were no tax consequences because it was within my Roth IRA.

mathjak107 wrote: ↑Wed Jan 27, 2021 10:17 am I never ever let the tax tail wag the tax dog

wag the trading dog, you mean.

jhogue wrote: ↑Thu Jan 28, 2021 9:54 pm I rebalanced out of stocks on Monday.

It seemed like the right thing to do, given the frothy activity in the equity markets. There were no tax consequences because it was within my Roth IRA.

I trimmed some stocks (VP) this week too. Stocks have had a good run in general, and I bought a lot in late March so my VP has done really well.

The stocks in my PP bucket are still on-balance.

Likewise, I sold TLT and bought stocks (ITOT) back in March of 2020.

Reducing stock exposure (30.8% --> 25.0%) in the midst of the mania over GameStop feels good right now, doesn't it?

jhogue wrote: ↑Fri Jan 29, 2021 10:48 am Likewise, I sold TLT and bought stocks (ITOT) back in March of 2020.

Reducing stock exposure (30.8% --> 25.0%) in the midst of the mania over GameStop feels good right now, doesn't it?

I swear, if I sold at the top again, I'm getting out of the PP and going fully into day trading

They're talking about stocks on bodybuilding podcasts.

This has to be the end.

Kriegsspiel wrote: ↑Sat Jan 30, 2021 10:08 am They're talking about stocks on bodybuilding podcasts.

This has to be the end.

Totally. I read an article about this on... I want to say BNN? Where the author was talking about how he had his own 1929 shoeshine boy moment. His kid son was recommending Dogecoin.

I'm not even sure how to pronounce "Dogecoin."

"dog-gy-koyn"?

"doze-koyn"?

"dodgy coin"

"dodgy" sounds like a financial product no thinking person would want to buy.

Kriegsspiel wrote: ↑Sat Jan 30, 2021 10:08 am They're talking about stocks on bodybuilding podcasts.

This has to be the end.

As all the news outlets say, investing has been democratized. Robinhood, reddit, etc. A good crash will separate the __ from the ___. (The words aren’t coming to me. The Israelites from the Egyptians-drowning-in-the-Red-Sea? )

dualstow wrote: ↑Sat Jan 30, 2021 1:44 pm

Kriegsspiel wrote: ↑Sat Jan 30, 2021 10:08 am They're talking about stocks on bodybuilding podcasts.

This has to be the end.

As all the news outlets say, investing has been democratized. Robinhood, reddit, etc. A good crash will separate the __ from the ___. (The words aren’t coming to me. The Israelites from the Egyptians-drowning-in-the-Red-Sea? )

The men from the boys.
It's an older meme, sir, but it checks out.

Wheat from the chaff could also fit. Not as well as men and boys though.

"The long from the short."

lol

That’s funny. Men from boys and wheat from chaff did come to mind, but I felt like writing something more visual.

To funny , I went the other way ...I trimmed equities and added more gold and bonds .... maybe it’s the contrarian in me ..

But with both Gld and tlt being the red headed step children since august, I figured thursday and Friday were good days to start to cut back equities , take profits and buy the unloved

mathjak107 wrote: ↑Sun Jan 31, 2021 3:20 am To funny , I went the other way ...I trimmed equities and added more gold and bonds .
......

I think Tom is being sarcastic. I can’t always tell.

Vinny

Oops, i mean me.