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It’s true that America has consistently performed well, but it has also consistently had a major downturn every 7 to 10 years. I think Warren would be fine with a cash hedge right now. Not predicting the apocolypse, just using data to my advantage.
I definitely see this this downturn as a normal and somewhat welcome occurence. I’m glad I started keeping some of my money in cash last year. Goes against your advice, but even Warren Buffet agrees that cash is the best hedge and noone should have 100% of their money invested this far into a bull market.
A friend shared this blog with me a bit before Thanksgiving, and as of today I’ve read everything , that you’ve written. There are so many people out there writing the same trite things over and over again, that it’s refreshing to see so many unique perspectives in one place. There is this pesky thing called reversion to the mean to think about.
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But the herd mentality encouraged by both governments and financial media tend to prevent people from seeing them. Once a quarter, or even once a year would probably be okay for the average passive investor once you understand what to look for. It’s also very easy to look up inflation-adjusted prices for all major commodities and see whether or not they are trading at historic lows. This is just basic business sense, and I’d suggest, one of the hallmarks of good investing. But how great of a long-term value they are depends greatly on their purchase price.
If you own shares in either of these funds, actual Dividend Eggs show up in your account every 3 months. You can use them to buy more shares, or to buy edible eggs or other groceries. Unfortunately, I have never looked at mining companies. They looked cheap for some time but i generally do not understand their business model fully.
I invested in a company that semms to be bargain, although I would like to have your opinion. I am a value investor and I have been following your blog. Our experience in Burgundy is that coopers can dictate prices. Some customers look East for cheaper oak forests but the firm has that covered with its Hungarian operation. I think that German companies can delist from stock exchange without a “fare” compensation/price. Clearly you can try to time a rebound, but midto long term German utilities do not have a lot of upside unless we get a surprise ice age within the next few years,..
In the meantime, I’ve implemented many MMM strategies so my low cost of living helps offset lost dividend income, etc., while I wait patiently and sleep well. I don’t see any reason why any Countries stocks will always have an upwards trend. To me there is always the risk of stan weinstein global trend alert things not improving by the time one retires. Personally, I have been using my investments to lower my cost of living (e.g. solar, geothermal,electric cars). This is still risky, but it at least guards me somewhat against not being able to pay my bills if I lose my job.
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The Stock Series by my pal Jim Collins goes through the philosophy of index fund investing at a leisurely pace with plenty of interesting stories and folksy wisdom. There are many funds that accomplish this, but my default choice is Vanguard’s VTI. You can buy it by getting a Vanguard account, or from any brokerage account . I made the investment considering the amasing multiples (p/b, p/e) but the margins are not a great indicator. Although the margins, ROE, RIC are very low and the demand for wine has been decresing in important markets, like china. It would be easier to answer the question if you would name the share…..
Why would stocks be the only thing in which a buyer completely ignores price ? People used to say this about housing or the Japanese stock market – “it will always make money over a long period of time”. The fact is any investment comes down to expected future cash flows – right now the 10-yr expected return on equities in the US is not fantastic if one uses prior history as a guide. When you’re buying stocks, you’re buying a share of a company’s earnings and assets.
- So as long as the percentage of shares you sell is significantly less than this percentage, you can still have a growing net worth.
- This is still risky, but it at least guards me somewhat against not being able to pay my bills if I lose my job.
- Some of them are there, for now, more than 10 years.
- Reading the article and some reports of the company, I´m on your side redarding the undervaluation.
The real reason for the selloff, of course, was that people and institutions in financial trouble had to dump good companies for whatever price they could get to raise cash. The company was not worth $15, there was simply no liquidity to support its true value. This is when guys like Warren Buffett come in and buy. After 26 years investing and now that I’m retired I see indexing as a much smarter play. It is tax efficient and over long periods of time managers can not beat the market.
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Despite panic, I still don’t touch German utilities. As I have written extensively, there are so many problems that there is a large risk that they turn out as typicalvalue traps. You might trade them succesfully but long building winning algorithmic trading systems term the upside is very limited. If you are interested in th sector, “collateral dmages” like Verbund might be the better chance. Hmm, looks like a “Hedge Fund hotel on fire”. I have no idea about that stock to be honest.
And now more 4.6 share price and NAV around 5.6. Regardless of any specific single data point, when you add up many macroeconomic indicators, to me they are pointing to a relatively flat stock market for the next 5-10 years. Hey Mr MMM; I wonder what could you lexatrade review advise to a brazilian mustachian. Have a look at BOVESPA Index… things can get really, really bad sometimes downhere, even dividends, are not being paid. Are you at all conerned about the performance of your Betterment accout compared to the index fund?
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At the beginning of the Nikkei bear market around 1990, that index had a P/E ratio of about 78. The forward P/E ratio of the S&P is currently around 16… if it ever gets above 50 then yeah, I’ll bail out. I’ll also have so much money in the bank that I will have plenty of time to consider alternate investments or just sit on cash and wait for the bubble to pop.
I even showed quite a few people the numbers and pretty much said I found a gold mine and they should get a shovel and dig. They just shrug, go to work in the morning and keep complaining that health insurance got 10 Euros more expensive. My take away is that the market is high, but what is the alternative? The way I see it stocks in aggregate pay inflation (2-3%), dividends (2% ish) and earnings (2-3%) that rolls up in an expectation of 6-8%. However, PE10 suggests that the market is roughly 35% overvalued. I’m early on my journey to financial freedom and – no matter how many times I hear this message – it always give me a sense of comfort.
I’m pretty conservative and don’t like having debt so that’s why I’m trying to pay it off as soon as I can under my circumstances. Maybe once I start working and earning more, I’ll go (now it’s more like 70 % on mortgage and 30 % in index funds). But then I got separated, bought my first apartment and at the bank they recommended saving in funds. So I took that money away and put it in a low cost index fund (that’s right, I currently only own one index fund).
While I agree with everything you are saying, and I am glad I am still “buying” these stocks at these prices, I sure would be bummed if I just retired this year. Put up a steady stock investment every month. But by removing emotion, you will overall make the right choice.