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[Nature] The Importance of Dry Powder in a Downturn


John Hjorth
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I was going to use my dry powder in this downturn, but Hillary gave me a stand down order.

 

Which downturn? Did I miss anything?

 

I think he meant up-coming downturn, but he/it won't come because of Hillary. So there is a downturn because it's not coming up.

 

You know what I mean, eh?  8)

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I was going to use my dry powder in this downturn, but Hillary gave me a stand down order.

 

Which downturn? Did I miss anything?

 

I think he meant up-coming downturn, but he/it won't come because of Hillary. So there is a downturn because it's not coming up.

 

You know what I mean, eh?  8)

 

All I know is that in advance preparation for a downturn, I won't buy much into companies with a lot of dry powder expecting that one, the cash will protect their share prices, and two, they will actually deploy that dry powder. With only a couple exceptions, I got burned on both fronts in the 2008/09 market dip. My own dry powder (80% + cash by late '08) is what allowed me to buy more of the dry powder companies, among others.  I was very disappointed in how little opportunistic behavior took place among the cash rich companies I held. It was like people that buy gold for crisis protection. The crisis hits and they are too afraid to sell it, thinking that the crisis will only get worse. So they forego revenue on the way up, then ride their commodity right back down. Same seems to hold for those keeping cash in the bank.

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100 Year Old Galapagos Giant Tortoise Diego Saves Species from Extinction ["singlehandedly"<-??]

 

 

- - - o 0 o - - -

 

 

Have a nice weekend to all my fellow board members!

 

I'm not sure, ahem, that his powder was dry.  (sorry, could not resist.) But there is another point, metaphorically speaking.  You do need to plan for opportunities, but you have to avail yourself of what presents itself.  This is not to say that you buy to buy, but if the opportunity "jumps out at you" as Buffett has said, you can not 'sit on your hands'.

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