Going into a stock market bubble

[peter1234]

 

On a purely pragmatic level, it's hard to recommend using a tool that told you not to invest in early 2009, or that might have kept someone on the sidelines for decades.

 

http://finance.yahoo.com/echarts?s=HSGFX+Interactive#%7B%22range%22%3A%2210y%22%2C%22scale%22%3A%22linear%22%2C%22comparisons%22%3A%7B%22%5EDJI%22%3A%7B%22color%22%3A%22%23cc0000%22%2C%22weight%22%3A1%7D%2C%22%5EIXIC%22%3A%7B%22color%22%3A%22%23009999%22%2C%22weight%22%3A1%7D%7D%7D

 

Hussman makes rational arguments, but this is one painful graph.

[Charlie]

Here is an article from a very good Buffett follower Francois Rochon who thinks there are better times ahead for the stock market.

 

http://www.givernycapital.com/assets/documents/192/2014_07_14_Gazette.pdf?1407936284

 

 

:)

 

[giofranchi]

On a purely pragmatic level, it's hard to recommend using a tool that told you not to invest in early 2009, or that might have kept someone on the sidelines for decades.

 

http://finance.yahoo.com/echarts?s=HSGFX+Interactive#%7B%22range%22%3A%2210y%22%2C%22scale%22%3A%22linear%22%2C%22comparisons%22%3A%7B%22%5EDJI%22%3A%7B%22color%22%3A%22%23cc0000%22%2C%22weight%22%3A1%7D%2C%22%5EIXIC%22%3A%7B%22color%22%3A%22%23009999%22%2C%22weight%22%3A1%7D%7D%7D

 

Liberty,

my firm’s equity is up 25.83% so far this year… Last November 06 I started a thread titled “Yesterday I doubled my capital for the first time”, saying I was pleased I went from 1 million Euros to 2 million Euros in 4 years… Well, yesterday I was above 2.1 million Euros for the firs time!… Clearly I am doing business, and a generally overvalued stock market doesn’t prevent me from investing 70% of my capital in businesses I think I know well at good prices…

 

Let’s just put it this way: if valuations were lower and the general level of indebtedness were lower, I probably would be holding only 10%-15% in cash, instead of 30%… what’s wrong with that?! As far as I know, no one has ever suggested the Shiller CAPE should be used as a tool to be in or out of investing and doing business… I am always investing and doing business, and sincerely I am more worried about the general level of indebtedness than about stretched stock market valuations.

 

As an aside, this is another point I disagree with the author of the Shiller CAPE article: at the end of that piece he abandons statistical reasonings to venture into the treacherous land of “economics”… And he suggests that human beings become better and better at dealing with crises, therefore the next one will be milder because of our increased ability of dampening its effects… Well, I disagree: if humans being are getting better and better, please can someone explain how we got into a state of indebtedness that has probably never happened before in human history?? When debts are so elevated, a lot of capital must have been used foolishly… And deep losses are inevitable. Either the borrowers will suffer, or the lenders, or both… But there is no easy way out of misallocation of capital.

I will be ready to acknowledge a real improvement in human behavior, when we finally learn to grow gradually, without relying too much on the use of debt, and therefore when we show we are able to avoid the building up of an unsustainable level of indebtedness. I am sure we will get there sooner or later, but not this time… This time imo it is already too late.

 

Gio

 

[cobafdek]

when you dabble too much with statistical analysis, you might happen to lose sight of the most basic, and imo important, things

 

When you get really good with statistical analysis, you end up at the university writing all kinds of theoretical papers, which are read only by your fellow ivory tower academics, and you get tenured into a full professorship.  You might even get a Nobel Prize in Economics, like Scholes and Merton.  Then you start a hedge fund and call it Long-Term Capital Management.  End of point made.

 

So, what does statistical analysis have to do with investing?

 

Ben Graham used statistical analysis.  But his particular gift was in knowing how to use it.  We can be thankful that, though he taught at Columbia University, and later at UCLA, he was not a tenured full professor.  He knew theory, but never lost his common sense, and he knew how to operate in the real world.  His title at Columbia was "Lecturer in Finance," which I think is like being an adjunct professor, i.e., faculty who actually know how to teach, and are also overworked and underpaid compared to the tenured.

 

Finally, as far as medicine is concerned, I can only say that each discipline has its own practices and needs. The fact statistical analysis might be useful in medicine doesn’t say anything about its usefulness (or lack thereof) in investing.

 

The analogy between medicine and investing can only go so far.  I think the analogy begins to break down as follows.  In medicine, on-going research continuously feeds into and eventually improves practice.  In investing, it may be that Graham's use of statistical analysis after the 1929 crash resulted in all that ever needs to be known:  margin of safety, and a few basic value metrics.  Any further use of statistical analysis in the field of investing adds to Graham's discoveries only at the margins, if at all. 

 

In other words, current research on investing going on at the universities allows us to make the same mistakes, but with greater confidence!

 

P.S.  I admit your thoughts on this subject are more enjoyable reading than reading statistical analyses.  Looking forward to more of your reviews of philosophicaleconomics.com, which means you'll continue to have to read them . . .

 

[Liberty]

Gio, I don't disagree with anything you said in your last comment, and I don't think it changes anything I've said.

 

What you're talking about is degrees. Whatever gearing you give to macro tools (influencing you from 0 to 100% cash or from 10 to 30% cash...), if they are driving you in the wrong direction, you'll still be going in the wrong direction. Nobody knows the future, so maybe from today the right direction is to hold more cash. But the past is known, and it's pretty clear that someone who held more cash because of Hussman or the Schiller CAPE in the past few years has made a mistake (and Hussman himself wasn't spared in the crisis, it's not just the recovery that he missed). At one extreme, someone giving a really high weight to the Schiller CAPE would have been out of the market for decades because it was always "overvalued", but at the other extreme, someone giving only a little weight to the Schiller CAPE might still have been holding more cash than he otherwise would have held by just putting money in what attractive ideas are found, so there's a real "macro drag" there too.

 

My only point is that I'd rather look at companies individually and not take the macro into account, because there are more ways to be wrong than to be right with it, so over time I don't think it helps even if once in a while I succeed in timing things correctly and anticipating the thing that actually ends up happening. If I don't find any good investments, I'll naturally end up with lots of cash. That's just my approach, and it's fine that you have yours.

 

Cheers! :)

[giofranchi]

At one extreme, someone giving a really high weight to the Schiller CAPE would have been out of the market for decades because it was always "overvalued", but at the other extreme, someone giving only a little weight to the Schiller CAPE might still have been holding more cash than he otherwise would have held by just putting money in what attractive ideas are found, so there's a real "macro drag" there too.

 

Well, I think the “macro” drag is an illusion. Instead, I look at it this way: I choose to earn 70 if everything goes right and 30 if trouble comes our way, instead of earning 100 if everything goes right and 0 if trouble comes our way. The total is always 100, that’s why I think a “macro” drag doesn’t really exist... But of course, if everything keeps going right, its illusion will surely be strengthened! ;)

 

Gio

[Liberty]

At one extreme, someone giving a really high weight to the Schiller CAPE would have been out of the market for decades because it was always "overvalued", but at the other extreme, someone giving only a little weight to the Schiller CAPE might still have been holding more cash than he otherwise would have held by just putting money in what attractive ideas are found, so there's a real "macro drag" there too.

 

Well, I think the “macro” drag is an illusion. Instead, I look at it this way: I choose to earn 70 if everything goes right and 30 if trouble comes our way, instead of earning 100 if everything goes right and 0 if trouble comes our way. The total is always 100, that’s why I think a “macro” drag doesn’t really exist... But of course, if everything keeps going right, its illusion will surely be strengthened! ;)

 

Gio

 

Opportunity cost is real. Otherwise, why not be 90% in cash and say "the total is always 100"? :)

 

You can say that it's about having a defensive posture, but if over 30 years the defensive posture reliably leaves you with fewer dollars at the end (see Racemize's paper), it was actually safer to not take the defensive posture. All it does is smooth out volatility, but if you're in good businesses, there'll be more upward volatility than downward, so best to just ride it all out (and let your partners do buybacks and acquisitions for you). That is, unless you believe that there's something on the horizon that could permanently wipe out someone that is entirely invested in the businesses that are in your current portfolio (because your alternative is to own more of those in stead of cash). But if there's something big enough to non-temporarily crush everything you own, you'd probably have bigger problems than investing... Canned food and ammo, etc. Everything else is market timing, IMO, and few people are good enough at that to win more extra performance than they lose (ie. they'll brag about buying something at the bottom but they won't count spending years holdings tons of cash that could have been deployed in attractive opportunities against that win).

[merkhet]

Agreed. Opportunity cost is the most pervasive cost because it's the one you don't quite recognize at the start until it's a bit late.

 

Think about Munger's quote on the worst investment.

 

The worst investment is a wonderful company that never scales.

[Liberty]

And to be clear, I'm not saying "everybody should be fully invested all the time".

 

I believe there are times when I'd probably be 100% cash (can't find anything worth buying, everything I own was very overvalued so got sold).

 

What I'm saying is just: If, say, I thought that Liberty Broadband and Fairfax were very cheap right now, I think it would be a better idea to buy more of them - even if I were to later sell some shares to finance a different, even cheaper purchase - than to hold cash for macro reasons (there might be other non macro reasons to hold cash, such as potential redemptions if you have OPM, or capital requirements for a business, etc).

 

As I said above, it's certainly possible to get timing right sometimes and enter a huge market crash with tons of cash. But we hear about those a lot more than about people who rode a huge bull market with tons of cash (or worse, while shorting the market) despite having seen lots of good opportunities... Two sides of the same coin, but one requires market timing and the other just buying things that meet your investing criteria when you see them.

[yadayada]

The way I see it, if you are like 95% invested, there is always some stock in your portfolio that is up a little. So let's say you put 10% in something, and it is now up 10%, but the rest is down (unlikely if you bought cheap enough), you can always sell this one if you encounter a homerun type opportunnity. And now you will have over 15% available!

 

And you don't have to worry much about selling the cheapest stock. Because they are least likely to go down as most negative events are priced in already. And if it is likely that a market crash will ruin your portfolio, or performance, you did not do a good job at buying cheap enough.

[cobafdek]

over 30 years the defensive posture reliably leaves you with fewer dollars at the end (see Racemize's paper)

 

Everything else is market timing, IMO, and few people are good enough at that to win more extra performance than they lose

 

Another great line from Graham (Intelligent Investor, 1st ed.):  ". . . timing is of no real value to the investor unless it coincides with pricing---that is, unless it enables him to repurchase his shares at substantially under his previous selling price."  This quote gives ammo to both sides in this debate.

 

Thus, Gio could reasonably argue that he is not market timing, but rather market pricing.  At a Shiller PE of near 30, he is placing a rationally priced bet that his 30% cash position is better than a 0% cash position.  And there is a tantalizing hint in the latter part of racemize's essay that such a portfolio could work in the hands of gifted investors, albeit probably rarely ("holding cash appears to be most beneficial for active investors that have extreme volatility").  Moreover, he is leaving his invested funds in the hands of three stellar capital allocators.

 

Questions for Gio:

 

If you were not a businessman with an operating company that always prudently kept some cash on hand, and if you could invest only in an S&P500 or Total Market Index Fund---

 

1. With the Shiller CAPE near 30, would you have 30% (or so) in cash and 70% in the index fund?  (This question is to gauge how much weight you give to the Shiller CAPE, or similar market measures, in constructing your portfolio.)

 

2. Or would you be 100% invested in the index at all times?  (This question will perhaps gauge how believable you find the statistical research suggesting 0% cash gives the best long-term results.)

 

[vinod1]

And to be clear, I'm not saying "everybody should be fully invested all the time".

 

I believe there are times when I'd probably be 100% cash (can't find anything worth buying, everything I own was very overvalued so got sold).

 

What I'm saying is just: If, say, I thought that Liberty Broadband and Fairfax were very cheap right now, I think it would be a better idea to buy more of them - even if I were to later sell some shares to finance a different, even cheaper purchase - than to hold cash for macro reasons (there might be other non macro reasons to hold cash, such as potential redemptions if you have OPM, or capital requirements for a business, etc).

 

As I said above, it's certainly possible to get timing right sometimes and enter a huge market crash with tons of cash. But we hear about those a lot more than about people who rode a huge bull market with tons of cash (or worse, while shorting the market) despite having seen lots of good opportunities... Two sides of the same coin, but one requires market timing and the other just buying things that meet your investing criteria when you see them.

 

The question is what is "very cheap"? A couple of years ago, the weighted average of my portfolio (just a rough estimate) price/IV would have been below 50%. Right now it is likely above 70%. This is even if you ignore the much higher quality of the investments available a couple of years ago.

 

In addition, the number of ideas that meet the criteria are below the level that would provide adequate diversification for putting 100% of the portfolio.

 

Would you be willing to say put near 100% of the portfolio when you have say only 3-4 ideas that are say around 75% of IV? Would love to hear your perspective on this.

 

Vinod

[giofranchi]

Opportunity cost is real. Otherwise, why not be 90% in cash and say "the total is always 100"? :)

 

You can say that it's about having a defensive posture, but if over 30 years the defensive posture reliably leaves you with fewer dollars at the end (see Racemize's paper), it was actually safer to not take the defensive posture. All it does is smooth out volatility, but if you're in good businesses, there'll be more upward volatility than downward, so best to just ride it all out (and let your partners do buybacks and acquisitions for you). That is, unless you believe that there's something on the horizon that could permanently wipe out someone that is entirely invested in the businesses that are in your current portfolio (because your alternative is to own more of those in stead of cash). But if there's something big enough to non-temporarily crush everything you own, you'd probably have bigger problems than investing... Canned food and ammo, etc. Everything else is market timing, IMO, and few people are good enough at that to win more extra performance than they lose (ie. they'll brag about buying something at the bottom but they won't count spending years holdings tons of cash that could have been deployed in attractive opportunities against that win).

 

Two things:

1) I don’t think investing should be either black or white

2) I don’t think investing should be a static thing

 

1) If you are 100% aggressive, you’ll end up doing very well in a market that keeps going up. If you are 100% defensive, you’ll end up doing very well in a market that goes south. But in both cases, if the market does something different from what you expect, you’ll end up suffering. The ultimate goal of good investing imo is to put yourself in a position in which your dependence on what the market does gets minimized (again: if the market keeps going up I gain 70, if the market starts going south I gain 30). You might answer that choosing undervalued stocks is the best way to achieve that goal. But I believe that is just a misconception brought up by the fact the last two market crashes we have experienced were both resolved very quickly.

 

2) That’s why statistics imo are useless, and at times even worse, because they might convince you of something they cannot have valued with nearly enough precision, under the false disguise of analytical rigorousness! I started investing my firm’s funds in 2004, and since then I have already changed the amount of cash I hold at least 5 times:

2004: 100% invested

2006: 70% invested

2009: 100% invested

2012: 80% invested

2014: 70% invested

Not only, also the choice of my investments reflected each time more or less aggressiveness. Now tell me: how could ever a statistical paper examine with precision what I have done during the last 10 years, without possibly knowing all the details?! And what I have done is only one possibility in an ocean of other plausible permutations!

Simple and good common sense should prompt any of us to ask the following question: why should investors be supposed to act always 100% aggressively, or always 100% defensively? … And just let statistics say whatever they want! ;)

 

In other words, investing imo is an endeavour characterized by many shades of gray and continuous change.

 

Gio

 

[giofranchi]

Would you be willing to say put near 100% of the portfolio when you have say only 3-4 ideas that are say around 75% of IV? Would love to hear your perspective on this.

 

That’s the very same question I had already asked! And let me tell you what I think: if I were to decide the level of cash I hold only on the basis of “very cheap” opportunities, I would always be 100% invested. In fact, right now I would be 100% invested.

 

Following the pendulum is nothing but to heed Buffett’s warning:

The less prudence with which others conduct their affairs, the more prudence with which we should conduct ours.

And of course also the opposite is true. And imo the level of cash plays a big role!

 

Gio

 

[Liberty]

Another great line from Graham (Intelligent Investor, 1st ed.):  ". . . timing is of no real value to the investor unless it coincides with pricing---that is, unless it enables him to repurchase his shares at substantially under his previous selling price."  This quote gives ammo to both sides in this debate.

 

Thus, Gio could reasonably argue that he is not market timing, but rather market pricing.  At a Shiller PE of near 30, he is placing a rationally priced bet that his 30% cash position is better than a 0% cash position.  And there is a tantalizing hint in the latter part of racemize's essay that such a portfolio could work in the hands of gifted investors, albeit probably rarely ("holding cash appears to be most beneficial for active investors that have extreme volatility").  Moreover, he is leaving his invested funds in the hands of three stellar capital allocators.

 

What I mean by macro is looking at general things to make decisions about specific companies.

 

If you are investing in indexes, maybe looking at CAPE and such can be considered valuation.

 

But if you're thinking of investing in a specific company that you are finding cheap and would like to own, but don't do it because you think the index might fall/some reversion to some mean will happen at some point, that's market timing based on macro. That's what I'm trying to avoid. I don't think I have an edge there, and I think that a lot of people who will consider themselves to have been 'right' on macro will fail to properly take into account their opportunity cost (ie. a lot of people have been telling us to be careful of a market top for 3 years).

[Liberty]

The question is what is "very cheap"? A couple of years ago, the weighted average of my portfolio (just a rough estimate) price/IV would have been below 50%. Right now it is likely above 70%. This is even if you ignore the much higher quality of the investments available a couple of years ago.

 

In addition, the number of ideas that meet the criteria are below the level that would provide adequate diversification for putting 100% of the portfolio.

 

Would you be willing to say put near 100% of the portfolio when you have say only 3-4 ideas that are say around 75% of IV? Would love to hear your perspective on this.

 

Vinod

 

That's for each investor to determine. Some have very high hurdles, some are looking for 10%.. But whatever your target is, you have to ask if holding lots of cash helps you get closer to that target over long periods of time or if it holds you back.

[Liberty]

Two things:

1) I don’t think investing should be either black or white

2) I don’t think investing should be a static thing

 

Good. I don't either.

 

1) If you are 100% aggressive, you’ll end up doing very well in a market that keeps going up. If you are 100% defensive, you’ll end up doing very well in a market that goes south. But in both cases, if the market does something different from what you expect, you’ll end up suffering. The ultimate goal of good investing imo is to put yourself in a position in which your dependence on what the market does gets minimized (again: if the market keeps going up I gain 70, if the market starts going south I gain 30). You might answer that choosing undervalued stocks is the best way to achieve that goal. But I believe that is just a misconception brought up by the fact the last two market crashes we have experienced were both resolved very quickly.

 

You're looking at a single event (market drop, market rise). I'm looking at it over an investing career. Unless you can time market cycles reliably, I think the bottoms up approach is better than the macro approach. If I'm in good companies at good prices, I'll get through both up and down cycles just fine in the end. I might not get to buy as much as the bottom, but I won't spend years of value being created at my favorite companies holding fewer shares than I could have.

 

2) That’s why statistics imo are useless, and at times even worse, because they might convince you of something they cannot have valued with nearly enough precision, under the false disguise of analytical rigorousness! I started investing my firm’s funds in 2004, and since then I have already changed the amount of cash I hold at least 5 times:

2004: 100% invested

2006: 70% invested

2009: 100% invested

2012: 80% invested

2014: 70% invested

Not only, also the choice of my investments reflected each time more or less aggressiveness. Now tell me: how could ever a statistical paper examine with precision what I have done during the last 10 years, without possibly knowing all the details?! And what I have done is only one possibility in an ocean of other plausible permutations!

Simple and good common sense should prompt any of us to ask the following question: why should investors be supposed to act always 100% aggressively, or always 100% defensively? … And just let statistics say whatever they want! ;)

 

In other words, investing imo is an endeavour characterized by many shades of gray and continuous change.

 

Gio

 

Am I doing a bunch of statistical analysis here? I was just pointing to someone who has found valid flaws in the macro tools that you kept citing. If macro was as simple as "look at these things and make a decision based on the ratio", there would be a lot of rich macro investors. But it turns out, even Hussman isn't doing so hot, and in a lot of those cases, being early is the same as being wrong. That seems like a 9-foot hurdles to me, so I prefer not to play that game.

[giofranchi]

Unless you can time market cycles reliably, I think the bottoms up approach is better than the macro approach.

 

Why should it be either the “bottoms up” approach, or the “macro” approach? I always make use of a bottoms up approach, and simply let my cash reserve increase when I see a general market behavior that I deem too frothy and sometimes even reckless…

 

Let me ask you, if I may: what’s your cash level right now? Is it at zero?

 

Thank you,

 

Gio

 

[Liberty]

Why should it be either the “bottoms up” approach, or the “macro” approach? I always make use of a bottoms up approach, and simply let my cash reserve increase when I see a general market behavior that I deem too frothy and sometimes even reckless…

 

I don't think we have the same definitions for those words, because if you use general market levels and ratios to make decisions about a portfolio of single companies (and you don't own the general market), and you are seeing things that are attractively priced that you're not buying because of those decisions, that's macro investing to me by definition. That's a call on the general market. It's fine, you can do that if you want. It's just not something that I think I can do well.

 

Let me ask you, if I may: what’s your cash level right now? Is it at zero?

 

Yes.

[giofranchi]

I don't think we have the same definitions for those words, because if you use general market levels and ratios to make decisions about a portfolio of single companies (and you don't own the general market), and you are seeing things that are attractively priced that you're not buying because of those decisions, that's macro investing to me by definition. That's a call on the general market. It's fine, you can do that if you want. It's just not something that I think I can do well.

 

Those things might be attractively priced, if everything will be OK with the general market, while they might be expensive, if something rotten is lurking somewhere… Unfortunately, that’s the truth imo… A most uncomfortable truth, but still the truth! Because the companies in my portfolio don’t operate in a vacuum, instead they are deeply affected by what happens to the general environment around them.

 

Yes.

 

Ok, thank you!

 

Gio

[AzCactus]

Why should it be either the “bottoms up” approach, or the “macro” approach? I always make use of a bottoms up approach, and simply let my cash reserve increase when I see a general market behavior that I deem too frothy and sometimes even reckless…

 

I don't think we have the same definitions for those words, because if you use general market levels and ratios to make decisions about a portfolio of single companies (and you don't own the general market), and you are seeing things that are attractively priced that you're not buying because of those decisions, that's macro investing to me by definition. That's a call on the general market. It's fine, you can do that if you want. It's just not something that I think I can do well.

 

Let me ask you, if I may: what’s your cash level right now? Is it at zero?

 

Yes.

 

I think the key question to ask is not is your cash level at 0---we should be asking if the market dropped 20%-25% would you be  caught flat footed or have the ability to go on offense.  If someone has a $100K portfolio and is fully invested than their cash level maybe at 0.  However, if this same individual has $50K in cash that does not have a designated purpose than they would still have the ability to go on offense if prices dropped.

 

David

[giofranchi]

I think the key question to ask is not is your cash level at 0---we should be asking if the market dropped 20%-25% would you be  caught flat footed or have the ability to go on offense.  If someone has a $100K portfolio and is fully invested than their cash level maybe at 0.  However, if this same individual has $50K in cash that does not have a designated purpose than they would still have the ability to go on offense if prices dropped.

 

David

 

With this I agree wholeheartedly! :)

 

Gio

[Liberty]

I think the key question to ask is not is your cash level at 0---we should be asking if the market dropped 20%-25% would you be  caught flat footed or have the ability to go on offense.  If someone has a $100K portfolio and is fully invested than their cash level maybe at 0.  However, if this same individual has $50K in cash that does not have a designated purpose than they would still have the ability to go on offense if prices dropped.

 

David

 

That's exactly what we've been talking about here and in Racemize's thread.

 

It's easy to posit a single event where one approach of the other would be bad.

 

The reverse is equally true, but not as visible because sins of omission always less noticed. What if the market goes up rapidly for years while you hold a large amount of cash (this has just happened to many people over the past 5 years)? Many people never stopped being bearish after 2009 and missed multi-baggers. When they buy in the next downturn, it might not make up for their missed opportunities, but most of that will be pushed under the rug. Or maybe there's a drop, and they expect the apocalypse, but it's just a mild one and they never actually buy because they're so sure it'll go much lower...

 

What truly matters IMO is over long periods of time. I might not be able to buy as much during dips, but I will participate more when things go well. If the businesses that I pick have more attractive characteristics than the market overall, and are more attractively priced, and they can live through almost any crisis and deploy capital opportunistically (buybacks, M&A), then holding them seems quite safe to me and I feel like they can create more value for me than I could with cash.

 

If I could predict general market moves, I would. But I've been hearing people call for huge drops for years, and if I had listened to them I'd be poorer, and there would be the very real risk that I would stay bearish through the bounce off the bottom anyway and miss the following recovery (this seems to happen frequently even to very good investors). Timing is hard.

[frommi]

Does anyone know how Mecham was able to make 12% in 2008? From what i read he was invested in FFH and AZN, but was that all, was he fully invested?

Learning from that the answer is maybe be 100% invested but invest into companies that are cheap and where the business is not under pressure in a recession or perhaps even profits from a recession.

[giofranchi]

Learning from that the answer is maybe be 100% invested but invest into companies that are cheap and where the business is not under pressure in a recession or perhaps even profits from a recession.

 

Well… that’s much easier said than done!! ;)

 

Gio