The talking heads on Cavuto included Ben Stein and Jimmy Rogers as well as some jacked-up Gephardt backer who happens to be some kind of stock analyst/money manager. Well, it turns out everyone was bull market city except ole Jimmy. Jimmy says he's recently been selling his American and European stocks and just this week has taken his first short positions since last summer.
You know, Jimmy's has generally been a pretty sharp investor over the years. Anybody got similar sentiments to Jimmy these days?
Are we forgetting that Ben Stein (who I do rather admire, for various reasons), is indicating, by his very actions, that more money is to be made writing and pumping a book, rather than playing with diamonds?
<<Jimmy's has generally been a pretty sharp investor over the years.>>
Jimmy has done very well for himself, no doubt about it. Those following his advice have not. Jimmy has been touting "natural resources" and commodities since the early 1990s (at least). Those investments and the economies based on them (e.g. Canada, Australia) have not done very well at all. Also, I remember Jimmy pooh-poohing Intel -- that was about 3 or 4 stock splits ago.
One must remember that when Jimmy is trading for his own account, he is not is the same position as most of the rest of us. He has the resources, information and opportunities most of us will never have (sort of like Buffett).
One of his biggest blunders was recommending Asian stocks BIG-TIME just a year before the Asian crisis. In Barron's he said that he was putting all his money into China because that is where all manufacturing in the world is headed. He said that there wouldn't be any manufacturing in the world in 15 years outside of China. That was about 10 years ago. The Asian bubble burst shortly thereafter with many indexes falling 90%. 10 years later the indexes are still down sharply and lots of manufacturing is done outside of China.
Fools often make themselves easy to catch through the outrageous, foolish statements they cannot constrain themselves from making.
Well, then let me ask you a question: do you like holding money markets now when they're losing money after taxes and inflation relative to a stock "bull market", rising real estate, and positive bond performance? I call that painful. And if they aren't popular now, why in the world wouldn't they be very unpopular in short order?
"Cash is about the most unpopular and difficult place to hold capital right now. Kind of like REITs, small caps and bonds in '99."
WRONG. There is now MORE cash in Money Market accounts than in the history of the world. This cash is also yielding LESS in the Money Market accounts than it EVER has.
"the merits of remaining in cash until the market gets revalued."
Cash is about the most unpopular and difficult place to hold capital right now. Kind of like REITs, small caps and bonds in '99.
BTW, it certainly appears to me that LVLT qualifies as an exception to his non-preference for buying common stocks. So, there are ALWAYS exceptions. Just not large cap names in huge chunks of capital from what I see so far.
Also, I read that some large investor recently purchased puts on the S&P 500 lately - which was one reason for the downdraft in the market this week. Hmm. Warren has been known to dabble again in something that has previously worked quite well. We'll see.
"Remember, in early 2000 they cautioned investors to get out of the market, just before it peaked!"
That's funny. Oh, you may be serious. I can't tell.
I guess it's your choice to blow off his advice and not take heed of his actions. I certainly would not imply that if you do things differently than Warren that you can't make money. But we're talking about broad market performance and risk/reward here.
I don't know the name of the show Jim Rogers is on. It's on Saturday mornings on Fox at 10:30 Eastern Daylight Time. All of those shows sort of blur together, but Jim stands out as an independent thinker, and probably the only really successful investor on any of them. Some of his ideas are tough to imitate, but his thought process is very instructive.
Now just to throw in a bit of heresy, and toss a bit of gasoline on the fire, as much as I admire what Warren has done with BRK, he now has so much money to manage that it isn't very instructive for people to try to imitate him. What we need to know is what he would be doing if he had only $1million instead of $100billion. Surely he'd have a much different style and probably would be finding things to buy these days. Since that isn't possible, it might be to everyone's benefit to try to learn from watching the actions of other great investors as well.
Trying to predict the future only gets you into trouble and forces you into a mental state where you believe you have to defend your position. Jesse's more flexible way of thinking avoided this mental trap.
Still, one must have a conviction that the stock they have just purchased will outperform a risk-free investment. Buying without conviction leads to day-trading...flexible buying and selling depending on which way the wind is blowing.