Odd thoughts about the pre-market

I guess I should be grateful to N Korea for dropping all the stock prices for me, just when I have all this free cash sitting around (very unusual for me) from the Kite windfall. (Let’s just hope it doesn’t get more serious).

Saul

1 Like

Sorry, I should have marked that as grossly off topic.

Geo-political events have been short term buying opportunities for some time now. I’m thinking of you Brexit. Obviously, any further escalation with North Korea could have significant effects on the market. However, if nothing further happens or nothing significant comes of this, it will be a buying opportunity of some sort.

The thing with geo-political events is that they rarely have any real impact on the economy. And that is the reason I always see them as opportunities.

An economic black swan or a geo-political event so large it crimps the economy would be a different story. Well, that would be a buying opportunity as well. Just one that would take much longer to recover.

Here’s hoping none of this goes much further than my rambling thoughts.

Take care,
A.J.

1 Like

The pan-European STOXX 600 index fell more than 1 per cent to a six-month low, also weighed down by the surge of the euro above a key level, while U.S. futures fell as much as 0.85 per cent on the missile news before paring losses.

Japan’s Nikkei hit a four-month low before paring losses to end 0.5 per cent down.

https://beta.theglobeandmail.com/globe-investor/inside-the-m…

“Before paring losses,” typical reaction to panic selling. Doesn’t seem all that dire.

Denny Schlesinger

Hi Saul - how do you think about cash and your portfolio when you get a sudden cash you weren’t expecting? Do you have particular stocks in mind that you add to to absorb that cash or do you just add a new holding to keep your portfolio diversified?

Chad

1 Like

Remember when a tidal wave (tsunami) hit the island of Japan in 2011? Threats of a nuclear power damage proved unfortunately true…to the tune of around $ 300,000,000,000. The earth was knocked 6 1/2 inches off of its axis! It also moved Japan 4 meters closer to the US. More than 18,000 people were killed. Half a million people were driven from their homes. Radioactivity was spread thru out the countryside. It was the most costly natural disaster ever recorded.

The market reacted predictably with a sharp downturn. I told my wife that we were going to invest a large sum back into the market to take advantage of this buying opportunity.

Check out the charts of the S&P 500. Sure enough there was a downturn of around 15%. Around 6 months later the S&P had fully recovered to it’s previous highs and would go on to new highs for the NEXT SIX YEARS. And the climb continues to this day.

Moral for me: When the end of the world is at hand, take a deep breath and begin putting new money into the market. Five years later you might just be awfully glad that you did.

Jim

9 Likes

I will be surprised if you don’t buy a little more LGIH, Saul.

Hi Saul - how do you think about cash and your portfolio when you get a sudden cash you weren’t expecting? Do you have particular stocks in mind that you add to to absorb that cash or do you just add a new holding to keep your portfolio diversified?

Each time is different, but I never have a wait list. I’ve added a little to a couple of smaller positions, but it will probably take me a few weeks to get all that reinvested unless something new and exciting comes along.

1 Like

I will be surprised if you don’t buy a little more LGIH, Saul.

It’s already over a 10% position and my second largest, which is big enough, but even so I had a buy order in at down 10% (about $39.50) which didn’t fill.

1 Like