I love these insights you share Saul. Thinking of the overall portfolio performance versus individual stock performance seems so obvious but I think many, many people get hung up on this. I know I have in the past but I have seen a change in my investment style since following your board for years.
I did not post after your excellent post on growth rates and margin and how you explained that is a complete game changer. Your thought processes are excellent and your communication skills are even better. You really help me and many others in growing as investors. Thank you for all you do.
The one thing that I differ with you on is the use of cash for safety. I lean more towards how Bear thinks on this and manages his portfolio. I am not saying I am correct in my view point. However I bring this up because of your example of looking at overall portfolio performance and not individual stocks. I look at my cash and stock holdings as overall portfolio performance just as you mentioned in your post. I can keep large cash positions and still get better than index gains. My gains are not as good as yours or others on this board, but they are still good (beating the indexes) and they are with a large safety net of cash. If a down turn were to happen today, I would cheer as it would be a buying opportunity. If the market gets hotter, I will continue to outperform the indexes (or I believe I would).
Thanks Retirementdough for your kind words. As I have mentioned a few times, I also have taken out cash for spending money and emergencies, but I consider this as permanently removed from my portfolio and not sitting on the sidelines, waiting for a better price. It is money I won’t redeploy. At most I normally have 1% of money in cash on the sidelines waiting to redeploy, if I sold something and haven’t fully used the cash yet. I feel I have no facility in guessing and timing the market.
Best,
Saul