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  #141  
Old 05.12.2018, 15:26
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Re: Are you happy to lose 50%-80% of your wealth?

being invested in many growth stocks, i'm some 15% down from the peak the last few weeks. sad thing is i had no spare cash to buy into the dip.
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  #142  
Old 05.12.2018, 15:28
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Re: Are you happy to lose 50%-80% of your wealth?

I've been buying a few stocks in recent days/weeks - including AAPL, FB, MO... some relatively good value out there IMO. Holding some cash to take further advantage when I can though.
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  #143  
Old 05.12.2018, 16:14
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Re: Are you happy to lose 50%-80% of your wealth?

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I know a lot of you have a lot of your wealth tied up in the stock market.

It's also clear that in the past the stock market has crashed substantially and over a long period of time. e.g. 1929 wall street crash and more recently in japan.

So as many of you are retired or nearing retirement age, how do you manage the risk that 50%+ of your stock market wealth could be erased and stay low for potentially two decades or more?
Silly question.
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  #144  
Old 05.12.2018, 16:37
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Re: Are you happy to lose 50%-80% of your wealth?

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I've been buying a few stocks in recent days/weeks - including AAPL, FB, MO... some relatively good value out there IMO. Holding some cash to take further advantage when I can though.
i also bought some MO. FB is getting tempting, but since i'm out of cash, will wait for more bad news next year
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  #145  
Old 05.12.2018, 17:04
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Re: Are you happy to lose 50%-80% of your wealth?

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i also bought some MO. FB is getting tempting, but since i'm out of cash, will wait for more bad news next year
Could indeed get a lot cheaper, let's see. I'll be willing to increase my holding if it gets ridiculous (as long as the business itself remains good).

MO and tobacco in generally seems extremely cheap right now...priced as if they're going out of business when the fact is that earnings remain strong
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  #146  
Old 05.12.2018, 19:05
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Re: Are you happy to lose 50%-80% of your wealth?

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Could indeed get a lot cheaper, let's see. I'll be willing to increase my holding if it gets ridiculous (as long as the business itself remains good).

MO and tobacco in generally seems extremely cheap right now...priced as if they're going out of business when the fact is that earnings remain strong
i have quite a bit in tobacco and alcohol stocks which have taken a battering. millenials seem to be much healthier and so question marks over the future health of these industries in the future. also tobacco had some bad news on potential legislation (menthol ban).
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  #147  
Old 06.12.2018, 12:32
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Re: Are you happy to lose 50%-80% of your wealth?

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Research shows that after 20 positions further diversification makes very little difference.
This sounds strange to me. Any references?
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  #148  
Old 06.12.2018, 13:06
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Re: Are you happy to lose 50%-80% of your wealth?

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This sounds strange to me. Any references?
pretty logical mathematically. just try it on a sample of shares to test it out.
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  #149  
Old 06.12.2018, 16:05
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Re: Are you happy to lose 50%-80% of your wealth?

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pretty logical mathematically. just try it on a sample of shares to test it out.
In the context of Fundsmith that's complete nonsense.

A portfolio of 30 randomly selected stocks may get you up to 90% diversification or some such. But obviously the qualifiers mean that's the best you're likely to get and far from a given, that doesn't apply at all to each random portfolio.

Of course Fundsmith does the exact opposite. Last time I checked Smith intentionally concentrates the portfolio on 3 sectors and 2 closely intertwined countries with correlating business cycles. They ignore Mr Market by design.

That's not necessarily a bad thing. It's just anything but diversified and will hardly ever (probably never) get you the kind of diversification FMF claims.
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  #150  
Old 06.12.2018, 19:18
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Re: Are you happy to lose 50%-80% of your wealth?

As soon as Trump gets impeached ending all self inflicting trade wars and the world can get back to business as usual, then the markets will rebound. So just hold onto your hats and enjoy the ride.
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  #151  
Old 07.12.2018, 10:13
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Re: Are you happy to lose 50%-80% of your wealth?

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...Fundsmith ...It's just anything but diversified and will hardly ever (probably never) get you the kind of diversification FMF claims.
So out of the sectors intentionally ignored by Terry, which sectors would you invest into and how?

AFAIK:

1) Finance
2) Insurances
3) Infrastructure
4) Commodities
5) Real Estate

I cover 1, 2 and 3 with BRK, and would not touch 4) and I have enough in 5) through my own property.
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  #152  
Old 07.12.2018, 10:29
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Re: Are you happy to lose 50%-80% of your wealth?

Just bought some funds into water and medical devices
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  #153  
Old 07.12.2018, 10:31
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Re: Are you happy to lose 50%-80% of your wealth?

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So out of the sectors intentionally ignored by Terry, which sectors would you invest into and how?

AFAIK:

1) Finance
2) Insurances
3) Infrastructure
4) Commodities
5) Real Estate

I cover 1, 2 and 3 with BRK, and would not touch 4) and I have enough in 5) through my own property.
i don't know how BRK does it, but at a time when everybody else seems to be flaming out, it keeps on trucking.

covering the first 3 with BRK is quite a nice way to do it. #4 is very difficult unless you want to own energy/mining stocks. i bought uranium through a fund, but that's quite a long term and speculative gamble.
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  #154  
Old 10.12.2018, 12:42
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Re: Are you happy to lose 50%-80% of your wealth?

I came across a Buffett quote that I think is now my favourite from him:

"Stock prices will always be far more volatile than cash-equivalent holdings. Over the long term, however, currency-denominated instruments are riskier investments - far riskier investments - than widely-diversified stock portfolios that are bought over time and that are owned in a manner invoking only token fees and commissions. That lesson has not customarily been taught in business schools, where volatility is almost universally used as a proxy for risk. Though this pedagogic assumption makes for easy teaching, it is dead wrong: Volatility is far from synonymous with risk. Popular formulas that equate the two terms lead students, investors and CEOs astray."
Mr Buffett
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