Fear is the mind-killer

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Desert
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Re: Fear is the mind-killer

Post by Desert » Sat Nov 17, 2018 4:32 pm

Ochotona, that was a nice summary.
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Re: Fear is the mind-killer

Post by dualstow » Sat Nov 17, 2018 8:14 pm

Great title and first post (of this thread) Mr Stick. So glad to hear from you, no matter whether you’re in the pp, all stocks, or pork belly futures.

I read it with relish- well actually I read it over coconut-curry-lemongrass soup. Homemade.
And I look forward to reading the rest!
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Re: Fear is the mind-killer

Post by barrett » Sun Nov 18, 2018 7:31 am

ochotona wrote:
Sat Nov 17, 2018 1:18 pm
flyingpylon wrote:
Sat Nov 17, 2018 12:02 pm
ochotona wrote:
Sat Nov 17, 2018 9:33 am
But if we ever get to another March 2009 situation,
How will you know?
How can you not know? Stuff will be flying all over the place like a tornado hit it. You'll know, the question is, what will you do?
ocho, what did you actually do in March of 2009? Have you really learned a lot since then? Not only about markets, but about yourself and your willingness to take on risk? Not trying to be a smart ass... just asking. With only 10% cash in your portfolio you wouldn't be positioned to ramp up to 70% stocks. It's really easy in retrospect to see that March of 2009 was a great time to load up on equities, but at the time I didn't hear too many people saying with any confidence that the bottom was in.

I think the best outcomes during that crash was for people who entered 2008 with a lazy portfolio with a high cash position who also had the discipline to keep rebalancing into stocks. The second best position was probably for investors who didn't lose their jobs and who also actually kept purchasing stocks. But even that strategy was only effective for a relatively short time as the bounce back was quick.

I just can't predict this stuff. It might be March of 2001 for gold right now. I just have no clue.
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Re: Fear is the mind-killer

Post by ochotona » Sun Nov 18, 2018 8:11 am

barrett wrote:
Sun Nov 18, 2018 7:31 am
ochotona wrote:
Sat Nov 17, 2018 1:18 pm
flyingpylon wrote:
Sat Nov 17, 2018 12:02 pm


How will you know?
How can you not know? Stuff will be flying all over the place like a tornado hit it. You'll know, the question is, what will you do?
ocho, what did you actually do in March of 2009? Have you really learned a lot since then? Not only about markets, but about yourself and your willingness to take on risk? Not trying to be a smart ass... just asking. With only 10% cash in your portfolio you wouldn't be positioned to ramp up to 70% stocks. It's really easy in retrospect to see that March of 2009 was a great time to load up on equities, but at the time I didn't hear too many people saying with any confidence that the bottom was in.

I think the best outcomes during that crash was for people who entered 2008 with a lazy portfolio with a high cash position who also had the discipline to keep rebalancing into stocks. The second best position was probably for investors who didn't lose their jobs and who also actually kept purchasing stocks. But even that strategy was only effective for a relatively short time as the bounce back was quick.

I just can't predict this stuff. It might be March of 2001 for gold right now. I just have no clue.
As 2008 unfolded, I lightened up on stocks from an aggressive position maybe 80% to about 50% before the Lehmann Moment. I didn't have much cash, but had bonds. In March 2009 I decide to take my bonds and redeploy into stock in ten monthly steps. I remember that talk with my wife, almost a decade later.

In retrospect, I was lucky. The S&P500 might've gone from 666 to 333. I didn't have a process other than "buy when others are fearful". That process (lack thereof) has failed me since in different sectors; energy, gold.

I have learned a lot. The value of cash as an asset (it's a call option on anything), I had no gold in 2008-2008, and I'm using simple but robust technical indicators, and I've found researchers that I like (Kathy Jones for bonds; Ned Davis, Lance Roberts, I find value in the bearishness of Hussman, he's the Roman slave whispering in my ear "this too shall pass").

In 2000, I was fully exposed to the bear market. I was unaware of it mostly; I don't remember feeling any angst during that period. I had much less money back then, and still 26 years from retirement. Now I'm 7.5 years out.

I wish I knew in 2000 what I know now. My net worth would be 50% greater. I'm passing the learnings on to my daughter. She's graduating with a BSEE and going to work in EE in June. I think that's how families get wealthy. I loved my Dad, but didn't learn Jack from him about money. Learned much more from Mom. She practised Couch Potato portfolio investing.
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Re: Fear is the mind-killer

Post by dualstow » Sun Nov 18, 2018 8:15 am

+1 Barrett
And even if I had been wise enough to want to buy stocks before the bounce back, my first wife and I parted ways in ‘09. I didn’t have free cash to put into the market. I had to drip it in over the next decade.
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Re: Fear is the mind-killer

Post by pugchief » Sun Nov 18, 2018 8:22 am

dualstow wrote:
Sun Nov 18, 2018 8:15 am
my first wife and I parted ways in ‘09. I didn’t have free cash to put into the market. I had to drip it in over the next decade.
Likewise. That was not a good year to be splitting assets. :( >:(
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Re: Fear is the mind-killer

Post by Mountaineer » Sun Nov 18, 2018 8:28 am

dualstow wrote:
Sat Nov 17, 2018 8:14 pm
Great title and first post (of this thread) Mr Stick. So glad to hear from you, no matter whether you’re in the pp, all stocks, or pork belly futures.

I read it with relish- well actually I read it over coconut-curry-lemongrass soup. Homemade.
And I look forward to reading the rest!
Would you mind sharing the receipe? Sounds delicious.
Vocation - doing what God has given me to do for the sake of the other.
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Re: Fear is the mind-killer

Post by Maddy » Sun Nov 18, 2018 9:11 am

I've come to embrace fear. Far from a mind-killer, it's one of the most efficient learning tools we have. Research has shown that organisms adapt far more efficiently to negative reinforcement than to positive; you touch a hot stove once and never again. The so-called "negative" personality may, in the large scheme of things, have a real evolutionary advantage.
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Re: Fear is the mind-killer

Post by Kriegsspiel » Sun Nov 18, 2018 9:29 am

I didn't even know what the stock market was in 2009. In 2010 my buddy got me started investing and I got Greenblatt's book from the library.

At that point, VTI could pass the Magic Formula valuation screen ^-^ Too bad I didn't know wtf I was doing.
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Re: Fear is the mind-killer

Post by dualstow » Sun Nov 18, 2018 12:33 pm

Mountaineer wrote:
Sun Nov 18, 2018 8:28 am
dualstow wrote:
Sat Nov 17, 2018 8:14 pm
Great title and first post (of this thread) Mr Stick. So glad to hear from you, no matter whether you’re in the pp, all stocks, or pork belly futures.

I read it with relish- well actually I read it over coconut-curry-lemongrass soup. Homemade.
And I look forward to reading the rest!
Would you mind sharing the receipe? Sounds delicious.
It was/it is. Enjoy. O0
https://littleferrarokitchen.com/lemong ... ent-309693
Karl Popper: Paradox of Tolerance
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Re: Fear is the mind-killer

Post by dualstow » Sun Nov 18, 2018 12:36 pm

Ok, I think I have it. Pug, you quoted me but with the word "first" crossed out, probably as shorthand for your case, but since it's my quote it kinda looks like I split with a later wife as well, which is not the case. O0
pugchief wrote:
Sun Nov 18, 2018 8:22 am
dualstow wrote:
Sun Nov 18, 2018 8:15 am
my first wife and I parted ways in ‘09. I didn’t have free cash to put into the market. I had to drip it in over the next decade.
Likewise, except I'm not remarried. That was not a good year to be splitting assets. :( >:(
Karl Popper: Paradox of Tolerance
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Re: Fear is the mind-killer

Post by Mountaineer » Sun Nov 18, 2018 12:41 pm

dualstow wrote:
Sun Nov 18, 2018 12:33 pm
Mountaineer wrote:
Sun Nov 18, 2018 8:28 am
dualstow wrote:
Sat Nov 17, 2018 8:14 pm
Great title and first post (of this thread) Mr Stick. So glad to hear from you, no matter whether you’re in the pp, all stocks, or pork belly futures.

I read it with relish- well actually I read it over coconut-curry-lemongrass soup. Homemade.
And I look forward to reading the rest!
Would you mind sharing the receipe? Sounds delicious.
It was/it is. Enjoy. O0
https://littleferrarokitchen.com/lemong ... ent-309693
Thank you, I can hardly wait to try it. 8)
Vocation - doing what God has given me to do for the sake of the other.
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