Fear is the mind-killer

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pugchief
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Re: Fear is the mind-killer

Post by pugchief » Sun Nov 18, 2018 3:14 pm

dualstow wrote:
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. :( >:(
Crossed out because, for me, the "first wife" will be the only wife. Once was enough. Since I don't want more kids, I don't see any upside.
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Re: Fear is the mind-killer

Post by Kriegsspiel » Sun Nov 18, 2018 4:29 pm

Amateurs fear investing. Professionals fear marriage.
- Prussian General
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Re: Fear is the mind-killer

Post by dualstow » Sun Nov 18, 2018 4:35 pm

Kriegsspiel wrote:
Sun Nov 18, 2018 4:29 pm
Amateurs fear investing. Professionals fear marriage.
- Prussian General
😂
Karl Popper: Paradox of Tolerance
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Re: Fear is the mind-killer

Post by pugchief » Sun Nov 18, 2018 5:57 pm

Kriegsspiel wrote:
Sun Nov 18, 2018 4:29 pm
Amateurs fear investing. Professionals fear marriage.
- Prussian General
;D ;D
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Re: Fear is the mind-killer

Post by Mark Leavy » Sun Nov 18, 2018 11:11 pm

You continue to intrigue me, PS.

Finish the quote...

I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.
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Re: Fear is the mind-killer

Post by barrett » Mon Nov 19, 2018 2:38 pm

ochotona wrote:
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


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.
Thanks for sharing all that, ocho. Very interesting.

I think when considering what our parents teach us about money, we have to consider what market conditions and world events they have lived through. Didn't you post on here that your family is Chinese? No mater when they came to the US, there must be an interesting story there.

My dad and mom were born (here in the US) in 1917 and 1918 respectively. So they both went through the Great Depression and its hellish stock market. My dad served in WWII for the duration and it took him about another ten years to really get back on his feet after that... so basically 15 prime earning years taken away. He retired in 1983 so he had just lived through 15 years of crippling inflation and seen gold skyrocket and then tumble back down. Stocks were just starting a historic bull run at that point but none of us really knew that at the time. My sister said a couple of years back that our parents never taught us much about money and I asked her what lessons she would have drawn from all of the above.

Our parents worked hard and lived well within their fairly limited means. That was their main contribution to our understanding of money .
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Re: Fear is the mind-killer

Post by stuper1 » Mon Nov 19, 2018 2:56 pm

barrett wrote:
Mon Nov 19, 2018 2:38 pm
Our parents worked hard and lived well within their fairly limited means. That was their main contribution to our understanding of money .
That is the most important lesson to be taught, and is also I think very much in line with Pointed Stick's original post in this thread.
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Re: Fear is the mind-killer

Post by ochotona » Mon Nov 19, 2018 5:10 pm

barrett wrote:
Mon Nov 19, 2018 2:38 pm
Thanks for sharing all that, ocho. Very interesting.

I think when considering what our parents teach us about money, we have to consider what market conditions and world events they have lived through. Didn't you post on here that your family is Chinese? No mater when they came to the US, there must be an interesting story there.

My dad and mom were born (here in the US) in 1917 and 1918 respectively. So they both went through the Great Depression and its hellish stock market. My dad served in WWII for the duration and it took him about another ten years to really get back on his feet after that... so basically 15 prime earning years taken away. He retired in 1983 so he had just lived through 15 years of crippling inflation and seen gold skyrocket and then tumble back down. Stocks were just starting a historic bull run at that point but none of us really knew that at the time. My sister said a couple of years back that our parents never taught us much about money and I asked her what lessons she would have drawn from all of the above.

Our parents worked hard and lived well within their fairly limited means. That was their main contribution to our understanding of money .
The mind-blowing sequel is that my Aunt in China just days ago sent $20,000 to my Mother to pay her back for twenty years of Mother sending money over to China when they were dirt-poor, and also to pay back for sponsoring relatives' to emigration to the US. More than any statistic that tells you how far China has come.

Yeah, and living through the Depression and WW2 just completely colored an entire generation's thinking about money in a major way; and that was a worldwide phenomenon, not just in the USA.
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Re: Fear is the mind-killer

Post by jacksonM » Mon Nov 19, 2018 6:33 pm

Mark Leavy wrote:
Sun Nov 18, 2018 11:11 pm
You continue to intrigue me, PS.

Finish the quote...

I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.
Sounded like a Buddhist quote until I got to the last sentence.
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Re: Fear is the mind-killer

Post by sophie » Tue Nov 20, 2018 7:12 am

ochotona wrote:
Mon Nov 19, 2018 5:10 pm
Yeah, and living through the Depression and WW2 just completely colored an entire generation's thinking about money in a major way; and that was a worldwide phenomenon, not just in the USA.
I remember my dad's stories about growing up in the Depression era. He was all about frugality, DIY'ing, and good citizenship, more so than my mother who came to the US in 1947 and didn't have that experience. I was thinking that the Great Recession might have a similar effect, but apparently not so much. It did bring a new emphasis on frugality, and perhaps was also a major factor in the FIRE movement.

Some big differences between our parents' situation and ours: back then, when you got a job with a large company, the company took good care of you. As long as you were a good corporate citizen you could look forward to a 30 year career, steady salary increases, and a pension for retirement. Investing wasn't something that most people did. If you had savings, you put it into a passbook account that paid 5% interest. I don't think the market was on people's minds as much as it is today.
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Re: Fear is the mind-killer

Post by Ad Orientem » Tue Nov 20, 2018 9:47 am

sophie wrote:
Tue Nov 20, 2018 7:12 am
ochotona wrote:
Mon Nov 19, 2018 5:10 pm
Yeah, and living through the Depression and WW2 just completely colored an entire generation's thinking about money in a major way; and that was a worldwide phenomenon, not just in the USA.
I remember my dad's stories about growing up in the Depression era. He was all about frugality, DIY'ing, and good citizenship, more so than my mother who came to the US in 1947 and didn't have that experience. I was thinking that the Great Recession might have a similar effect, but apparently not so much. It did bring a new emphasis on frugality, and perhaps was also a major factor in the FIRE movement.

Some big differences between our parents' situation and ours: back then, when you got a job with a large company, the company took good care of you. As long as you were a good corporate citizen you could look forward to a 30 year career, steady salary increases, and a pension for retirement. Investing wasn't something that most people did. If you had savings, you put it into a passbook account that paid 5% interest. I don't think the market was on people's minds as much as it is today.
People who came through the Depression often wound up with a lifelong suspicion of stocks and banks. My late aunt Mary's mother and father in law mostly lived on cash and kept no more money in the bank than what was needed to cover the very few checks they wrote. Shortly before he died in the 1970's from cancer (he was a 3-4 packs a day man) he told his kids including my uncle Dean where the money stash was. Behind some loose bricks in the basement wall they found two boxes with wads of cash. Some dated all the way back to the 1940's along with wartime ration books.The cash was almost $30,000 which was lot of money in the 70's.
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Re: Fear is the mind-killer

Post by jacksonM » Tue Nov 20, 2018 9:55 am

sophie wrote:
Tue Nov 20, 2018 7:12 am
ochotona wrote:
Mon Nov 19, 2018 5:10 pm
Yeah, and living through the Depression and WW2 just completely colored an entire generation's thinking about money in a major way; and that was a worldwide phenomenon, not just in the USA.
I remember my dad's stories about growing up in the Depression era. He was all about frugality, DIY'ing, and good citizenship, more so than my mother who came to the US in 1947 and didn't have that experience. I was thinking that the Great Recession might have a similar effect, but apparently not so much. It did bring a new emphasis on frugality, and perhaps was also a major factor in the FIRE movement.

Some big differences between our parents' situation and ours: back then, when you got a job with a large company, the company took good care of you. As long as you were a good corporate citizen you could look forward to a 30 year career, steady salary increases, and a pension for retirement. Investing wasn't something that most people did. If you had savings, you put it into a passbook account that paid 5% interest. I don't think the market was on people's minds as much as it is today.
I think a lot of people might have learned the wrong lesson from the Great Recession because stocks recovered fairly quickly and we are now well into the second longest recovery ever. History often repeats itself but it has no obligation to do so. A better learning experience, at least for me, was the crash of the dot com bubble.

My parents sound exactly like yours but when they retired and put their money into a passbook account it was paying more like 18%. I think that was the same kind of lesson wrongly learned and ZIRP would eventually become the ultimate teacher. Another lesson was that fixed pensions with no cost of living increase will eventually become nearly worthless if you live for 30 years after retirement. I think my Dad was getting around $80 a month when he died. For them SS was a much better deal.
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