*Investors Blog*

[doublebase]

DCA is better for me going forward. I got lucky with some nice entry / exit points over the past 20 years.


- 2000 Dot Com bubble I lost $50K 100% my fault for being a dumb-dumb
- 2001 Sept 11th attacks I stayed in and DCA
- 2007-2009 housing bust I stayed in and DCA
- 2010-2019 DCA in all accounts (90% ETFs / 10% individual stocks) big AMZN position

- 2019 late in the year I went heavy cash. I’ve spoken about this in the past and even sent a few PMs to some folks on here asking them if they were starting to get antsy with all the bad economic news.
$100B in nightly Fed bank repos, bank repos were increasing exponentially and it got me very worried, lots of debt bubbles, Warren Buffett having $130B cash on the sidelines (What did he know ? ). Yield inversion, long haul big rig truckers saying economy is slowing down, CSX parking locomotives, etc…

- 2020 Covid shut down and markets tanked. Luckily I was about 80% cash and simply DCA back in.
Gov helicopter money and various stimulus really kicked things into overdrive. Trillions pumped into system and people were paid to stay home and stimulate the economy.

- 2022 Ukrainian War and I had a BIG position in 3X natural gas & 3X oil. Made very good money.
- 2023 my cash enjoying these higher Fed rates


You mentioned selling Boeing. I had immediately sold all my Boeing in 2013 just as the first report of 787 battery issues. I was hoping the FAA grounding of all 787 jets would hurt BA stock but it didn’t, their stock kept flying (no pun intended) higher and higher.
I sold BA and piled all that cash in AMZN increasing my holdings. My BA mistake turned out for the better.

Sometimes having a strategy pays off. I have a little casino cash for unexpected buying opportunities.

Excellent info! You’ve done great for yourself! Impressive.

Speaking of cash, for the first time I’m considering a 10 month CD (5.5%). But I won’t put everything in it, I’d like to leave enough to DCA or make a big dip in if it looks like a unique situation.

I keep hearing about this M1 finance app/brokerage. I’m interested. I believe it’s a bank, and insured. They’re paying 5% interest on their bank account, allow 1-2 daily trades (free), one trade in the morning, the other in the afternoon. They have a very easy to use and unique way to dollar cost average and they have a HUGE drop down menu of portfolio options to choose from, or build your own. So, basically any/every portfolio/investment allocation formula. And you just set up your DCA allotments and it automatically distributes it by percentage into whatever portfolio you choose or develop yourself. They call them “pies”. You can have one, or as many as you’d like. I may look into it.

 

[Pablo]

Excellent info! You’ve done great for yourself! Impressive.

Speaking of cash, for the first time I’m considering a 10 month CD (5.5%). But I won’t put everything in it, I’d like to leave enough to DCA or make a big dip in if it looks like a unique situation.

I keep hearing about this M1 finance app/brokerage. I’m interested. I believe it’s a bank, and insured. They’re paying 5% interest on their bank account, allow 1-2 daily trades (free), one trade in the morning, the other in the afternoon. They have a very easy to use and unique way to dollar cost average and they have a HUGE drop down menu of portfolio options to choose from, or build your own. So, basically any/every portfolio/investment allocation formula. And you just set up your DCA allotments and it automatically distributes it by percentage into whatever portfolio you choose or develop yourself. They call them “pies”. You can have one, or as many as you’d like. I may look into it.

I don’t recommend M1. I had an account as a test and not for me.

Edit: it is just an added layer of complexity totally unnecessary for financial success. With the numbers you mention everything at Fidelity will be free

What’s wrong with a brokerage account with Fidelity for example?

 

[ecotourist]

I always imagined you were 10 years younger…

If that number is Jeff's age, I agree with you. He writes like he's at least 10 years younger - and that's a compliment.

 

[ecotourist]

Used to be. I am a late bloomer, if that helps. Happily retired.
I think I've posted I got my 1st degree at 40.

I'm a slow learner. Got my last credential at age 45. But better late than never.

When I was 40 and contemplating 4 more years of education, I realized that in 4 years I'd be 4 years older whether I did it or not. Best move ever.

 

[SC Maintenance]

What’s wrong with a brokerage account with Fidelity for example

I have Fidelity and Schwab. Schwab was TD Ameritrade which they bought. Loved TD. Hate Schwab. Thinking of moving everything to Fidelity but I am a little worried about having everything in one place. Well I have a 401K at Vanguard but thats current and can't move. All together its not a ton of money, but its all I got so I wonder.

Fidelity paid me a couple hundred bucks when I opened, so google around for a promo code. Not kidding - free money. You just have to deposit some money, and I was way over that anyway.

Are there really any retail brokers left besides these two? Anyone use Merril?

 

[ecotourist]

Looking at the US market as an outsider, I have concerns. The current run is great but the Tech 7 are driving all the recent gains. The rest of the market is flat. That doesn't seem healthy.

I am holding onto my US equity investments (VTI, JNJ, BRK, PG, VFV - which is the Vanguard Canada's S&P 500) but buying GICs (at 5.5% interest) and Bond Index ETFs with new money. They're all boring but boring can be good.

PS Does anyone have insight on why Buffet sold Berkshire's JNJ and PG?

 

[Pablo]

I have some money with Schwab but I don’t really trade there at all. I have some family trust money with LPL financial which charges a very low fee to keep me as a client. The rep is very sharp CFA CPA etc hahaha I don’t trust him and he knows it but we get along fine. Very conservative.

Fidelity is easy safe inexpensive and I’ve been with them 35 years

 

[SC Maintenance]

PS Does anyone have insight on why Buffet sold Berkshire's JNJ and PG?

I have no insight but I can tell you he did the exact same thing in 2009 with JNJ and PG. EXACT. Note the date on the article below. He is raising cash. The only reason to do that is he must believe there will be buying opportunities in the near future he wishes to be ready for. In his case it could be anything - but my guess he will buy up some companies that were bought by private equity on leverage who now can't make there payments and have no good exit.

The only other thing I can think of is he believes were at the part of the fed tightening cycle where you get out of consumer stocks.

https://www.gurufocus.com/news/5013...uffett-sell-johnson-johson-and-procter-gamble

 

[ecotourist]

I have no insight but I can tell you he did the exact same thing in 2009 with JNJ and PG. EXACT. Note the date on the article below. He is raising cash. The only reason to do that is he must believe there will be buying opportunities in the near future he wishes to be ready for. In his case it could be anything - but my guess he will buy up some companies that were bought by private equity on leverage who now can't make there payments and have no good exit.

The only other thing I can think of is he believes were at the part of the fed tightening cycle where you get out of consumer stocks.

Good article. Berkshire doesn't need cash right now but there may be spectacular opportunities on the horizon for people who can move a few billions overnight. As the article points out the rest of us don't have access to these sweet heart deals. But that's why we buy BRK.

Buffet has said he never wants to have to look to anyone for cash, ever, under any circumstances.

 

[99Saturn]

Are there really any retail brokers left besides these two? Anyone use Merril?

I get promos often from JPM, BofA, Citi anf WF for brokerage accounts but never look into them - there are other options out there.

Similar to you I had TD accounts that have not converted to Schwab. I happened to consolidate most into Fidelity where i had existing other accounts as well. It's convenient, no complaints. I have a very little left in Schwab but plan to close them out soon.

 

[doublebase]

I don’t recommend M1. I had an account as a test and not for me.

Edit: it is just an added layer of complexity totally unnecessary for financial success. With the numbers you mention everything at Fidelity will be free

What’s wrong with a brokerage account with Fidelity for example?

Good to know, I was looking for feedback.

I wasn’t sure Fidelity offered the same features, I liked the portfolio options M1 had, does Fidelity offer something like that?

 

[Pablo]

Good to know, I was looking for feedback.

I wasn’t sure Fidelity offered the same features, I liked the portfolio options M1 had, does Fidelity offer something like that?

You mean like the pies and such? No. But my assertion is you don’t need that. But if somehow it helps you psychologically I guess.

I contend there is nothing in the M1 gimmicks that will help make money or better investment decisions

 

[gfh77665]

Looking at the US market as an outsider, I have concerns. The current run is great but the Tech 7 are driving all the recent gains. The rest of the market is flat. That doesn't seem healthy.

I think its an oppourtunity presenting itself. Here is an excerpt of what Prof. Jeremy Seigle just said:

But with the S&P 500 selling at 18 times earnings that includes the higher priced tech stocks and 14 to 15 times earnings in ex-tech stocks—those are reasonable multiples for the markets for all these risks. Small cap companies, in my opinion, are priced for recession with multiples closer to 12 times earnings. So an economic outcome better than these depressed expectations provides upside to these smaller companies.

In other words there are many stocks left behind that still trade at recession levels.

 

[gfh77665]

I'm reposting the recession monitor along with the monthly chart of the SPX for comparison >>>>>>>>>>

View attachment 191199

In retrospect, "Bubble 1 and 2" were nothing!

 

[Pablo]

HA up yuge

ALK - off hard

 

[gfh77665]

Housing remains one of the best investments:

Real estate remains one of the solid and stable investments. The proof is in the pudding; over the past 81 years that we have been tracking home value data, there have only been seven years where the average home value dropped year over year.⁴ The net wealth of a homeowner is 40x that of a non-homeowner according to recent data, which shows how valuable a real estate investment can be.

 

[alarmguy]

Housing remains one of the best investments:

Absolutely ^^^ and the most cool thing of all, you can be almost penniless and turn yourself into multi millionaire using other peoples money to get started. Buying run down homes, fixing them up and renting them. Then watch them grow in value. Doesnt have to be run down. Just functional and priced right.
You dont need to be an Ivy League student, or any college student, all you need is determination and yes, education from successful people who do this.

 

[Pablo]

Housing remains one of the best investments:

Sometimes you have to rent, but most always a forced situation. Some key words there.

This current house was a (very slightly) distressed rental. Some turn-offs for lady buyers. Beat in areas, sheet paint, property looked like hades, etc. Now people even some ex RE folks come over and see no signs of "rental". Good price, sweat and purchased equity, Whammo, ahead by at least $200K in around 2 years. Hard to beat.

You gotta live somewhere. Location, location, location!

 

[JeffKeryk]

Housing remains one of the best investments:

Around here housing has been a gold mine. But getting in pretty much requires one nowadays.

 

[gfh77665]

Yes, the housing market mimics the equity market over the last 10-15 years. Both have run way up.