This seems to be a good time to mention (again) the Fear & Greed Index. I check it every day as a matter of practice. I prefer to know the general “temperature” of the Market as useful background information. It’s been diving into the “Fear” range lately. The lower it goes, the more I’m inclined to buy additional shares (in keeping with Warren Buffett’s dictum: “Be fearful when others are greedy and greedy only when others are fearful”. When it’s in the “Greed” range, I generally lighten up a bit. Based on the Index, there may be a bit more pain ahead. It’s good to note, however, that the Market generally doesn’t stay at either extreme for all that long.
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Thanks for posting that!
I have a few things like that that I check pretty often, but this seems an especially good and concise way to sum quite a lot! So thank you…
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Skepticism on the way CNN constructed this “index”. An index that drops 30% in a week is not reliable for making investment allocation decisions. 2 weeks ago it was in Greed.
Skepticism on the way CNN constructed this “index”.
There is an information box in the upper right hand corner that explains how the Index is constructed. It’s based on seven indicators. Use it if you’d like…or don’t.
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An index that drops 30% in a week is not reliable for making investment allocation decisions. 2 weeks ago it was in Greed.
Fear and Greed might be good trading indicators but not investing indicators no matter how large or small their swings. The longer your investment horizon the less relevant they are.
Denny Schlesinger
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Putnid, not sure this can be let pass! Your inclination is not (italics) ‘in keeping with Warren Buffett’s dictum’!
Buffett again: ‘You pay a very high price for a cheery consensus’.
If you pay a marginal and minuscule discount on that ‘very high price’ when the cheery consensus is intact, others are not in the least bit fearful and it follows you should not be greedy! You should in fact be fearful.
Valuation discussions are inapplicable to this board (for which I yield to none in gratitude to our host). It is about something else entirely which is why, apart from huge, long-term holdings ADBE, MSFT and CRM, my smallcap Saas holdings are now down to a negligible level from 10%, many having finally fallen through my desk-top trailing stop-loss last week. I had tightened them slightly a few days before. Do I care if I’ve got it wrong? No. It’s a day at the races and 10% was far too big a pf chip on the table. Net profit more than satisfactory - I raise a glass to S and P and C and others here: thank you.
Admittedly there was another factor, where I come from, CGT is 20% and is in danger of being increased. I took a view.
(Suggest comments, if any, to ‘Investing Philosophy’ in deference to Saul?)
Putnid, not sure this can be let pass! Your inclination is not (italics) ‘in keeping with Warren Buffett’s dictum’!
The oft quoted Buffett dictum is usually quoted incompletely. It is preceded by an admonition that market timing is foolish, and begins, " if they insist on trying to time their participation in equities,…"