Recently a poster here or at NPI took to task the opinion “I have better places for my money” hinting that it was somehow irrelevant, or dumb, or something. He didn’t specify.
While debating with myself about Pivotal I realized that “Better Places for my Money” (BPM) is actually an important factor in successful investing. For example high tech, healthcare, and finance are better sectors than the rest of the market. Asset light is better than asset heavy. Credit risk and debt are to be avoided. US is better than foreign. The above is on the macro level. If one has a wish list then the “Better Place” is also a stock vs. stock competition.
A “Better Place” on a stock vs. stock level requires more complex thinking than examining stocks individually. Saul seems to have the knack for it. His posts hint that often the switching is not entire positions but more likely trial trades, a bit here, a bit there. I’d like to hear Saul’s comments.
Over the weekend I started to realize that there might be “Better Places” for my PVTL money, more specifically in MDB. Posts here and at NPI started to highlight the strikes against PVTL that offset the good qualities of Pivotal. One strike is the recent IPO but MDB is not much older, October 2017 vs. April 2018. Also, the post earnings panic selling of PVTL seems to have bottomed last week. To switch or not to switch is the question. If to switch, all at once or bit by bit? Investing can be quite poetic! LOL
“Recently a poster here or at NPI took to task the opinion “I have better places for my money” hinting that it was somehow irrelevant, or dumb, or something. He didn’t specify.”
To be clear, that was a questioning about knowing what a ‘better’ place could be. This was discussed in the context of a shorter versus a longer timeframe when enough time is allowed for failures and successes to occur, and when a direction in the business could be discerned for the longer term.
Certainly the money could be used to buy a nice car that will be enjoyed for a few years. In the eye of some, that could be a better place to put their money. There is no judgement in that.
But the ‘better place’ meant a better place for the shorter term when a different stock could appreciate faster than the stock where the money is currently invested in. We can certainly play the game but to be right or not is not up to a skill like playing chess. Chess is a skill because there are clear rules and patterns. Predicting shorter term performance in the stock market is not. We can dream of patterns but the mechanics are so much more complex and intractable.
There will always be pros and cons for any choice. It might be more accurate in the longer run once we know what the business is up to. In the meantime it could meander and its stock can rise and fall on any ‘news’.
But the ‘better place’ meant a better place for the shorter term when a different stock could appreciate faster than the stock where the money is currently invested in. We can certainly play the game but to be right or not is not up to a skill like playing chess. Chess is a skill because there are clear rules and patterns. Predicting shorter term performance in the stock market is not. We can dream of patterns but the mechanics are so much more complex and intractable.
In this sense, in short term allocation of money, I concur with you. One often hears people putting money in BRK-a short term as if it were cash which no stock or even bond is. The post I was referring to didn’t make this distinction clear, at least not to me. When I say I have a ‘better place’ I mean a different investment, a different position.
I will go on record to say I sold my PVTL position in two trades. I took the proceeds and equally divided them into adding shares of ALGN, MDB and SQ. Might be the wrong move but I am not looking back.
Spent way to much time trying to understand PVTL’s technology and took my eye off of the end game. Lesson learned (for about the 20th time)
