The war started in Ukraine last night and futures are down in a big way this morning. It is going to be an ugly day with my portfolio - there is no way to avoid it.
So what should I do with my portfolio today? Absolutely nothing!
I am not planning to take any action on my portfolio…no buys…no sells…I am not even going to look at the numbers. There is no point in doing so on a day like today.
When war breaks out, this is what usually happens:
Rationality exits the market. Many people sell out of panic or fear or lack of trust in the future of their holdings. Those who need the cash get out quickly to stem the pain and reserve their balances. Those on margin get recalled by their lending institution and they lose their shirt. Stock prices are not dependable as a barometer to use for placing buy and sell orders, imo.
All the “military experts” come out of the closet to share their geo-political knowledge via media outlets. Good-to-know info that is based on guesses and is useless to an investor.
Most fintwit go mostly silent - they have no idea what to say or what to do. Many of them have never been through a war situation or experienced markets when military action is in progress. This is a good time to clean up your twitter feed by unfollowing those who are not insightful when it is needed most.
Folks start buying hedges at exorbitant prices. They do not realize that it is already too late to put on a hedge on your portfolio. The time to buy a hedge is when the market is in an uptrend and hedges are cheap.
So coming back to my plan for today and the next few weeks:
While I am not going to look at my portfolio, I am going to watch the broad market, sector, and commodity indexes closely. These will give us clues….over several days….as to how the market dynamics are shaping up, where there has been an over-reaction and which sectors/markets will remain depressed for a while.
There are going to be war updates on every channel to keep me informed of Putin’s march on Kiev. The actual battles could be short-lived, causing immense death and destruction along the way. The larger war will likely take months to play out and at some point, the markets will have priced in the new political landscape and will move on.
About 90% of companies have reported their Q4 2021 earnings and provided 2022 guidance. I am going back to these earnings reports, especially for my holdings, and re-scoring them using my analysis approach. I will update my shortlist of the highest scoring and lowest scoring companies. This list will guide my next actions.
Once I have my updated shortlist, I will identify $ amounts that I want to add to these stocks and price-points that I want to use for buy limit orders.
Today is not a day for FOMO or FUD. Neither is it a day to sell or even buy, irrespective of whether you see “great prices” on the screen.
It is a day to create a clear action plan and to stick to the plan.
Eh, we’ll see. I doubt Putin seriously wants to “conquer” Ukraine. That would be a massive headache for Russia. I suspect he wants to make a point, and then attach those eastern regions to Russia. After this, the pushing to get Ukraine into NATO will stop. Certain idiot Western politicians kept pushing after Russia made it clear this would not be acceptable. When a wolverine hisses at you, you’d best take the warning and back off.
It would be kind of funny if Russia got stuck with Chernobyl.
I keep thinking about the Rumsfeld phrase “provocative weakness”.
Eh, we’ll see. I doubt Putin seriously wants to “conquer” Ukraine. That would be a massive headache for Russia. I suspect he wants to make a point, and then attach those eastern regions to Russia. After this, the pushing to get Ukraine into NATO will stop. Certain idiot Western politicians kept pushing after Russia made it clear this would not be acceptable. When a wolverine hisses at you, you’d best take the warning and back off.
Putin has been explicit over the years that he views Ukraine as Russian and rightfully part of Russia. So now he has armored columns moving on Kyiv from two directions he’s going to pull up and call it a halt?
Eh, we’ll see. I doubt Putin seriously wants to “conquer” Ukraine. That would be a massive headache for Russia. I suspect he wants to make a point, and then attach those eastern regions to Russia. After this, the pushing to get Ukraine into NATO will stop. Certain idiot Western politicians kept pushing after Russia made it clear this would not be acceptable. When a wolverine hisses at you, you’d best take the warning and back off.
The largest relevance of the above geopolitical speculation here is that some people never take full measure of the facts that have been tossed directly into their laps, and continue to make the same misjudgements over and over, often with the same display of spectacularly misappropriated confidence. The guy who wrote the above speculation also got his head handed to him after the tech stock boom crashed, and then plunged head-first into the real estate boom. We know what happened then. Why the recurring misjudgement? Neville Chamberlain spent hours with Adolph Hitler and was sure he would not invade the rest of Europe after his initial territorial demands were addressed whereas Winston Churchill accurately sized Hitler up without ever talking to him, as did certain thoughtful writers way back in 1933. In any case, arriving at the conclusion that it is less likely that Putin really wants to conquer Ukraine after he’s already “taken back” (and ruined) Crimea, lied every step of the way into Ukraine, bombed multiple cities in Ukraine while taking out military installations there, ultimately putting a price on Ukraine’s leader, is the same quality of thought that concluded the tech bubble and real estate bubbles weren’t going to end with RAYVT holding the bag.