Great Quotes for Uncertain Times (February 21, 2016)

3811971_14558438119556_rId12

2016 has gotten off to a rocky start, to say the least. The stock markets around the globe are routinely swinging in the triple digits (both directions) on any given day… Overall market volatility is off the charts, which is why I am extremely hesitant to get back into the investing game right now.

As it pertains to long-term investing, the most popular approach will always be “buy and hold forever“; I prefer that method very much myself.

However, I am a patient guy and can afford to wait for things to settle out before jumping back into the fray for Round 2… Right now, I have an ownership stake in 8 rental properties that I rent out to tenants to generate positive cash flow; these investments were all accumulated between 2012-2015.

I’m cool with that; I bit off more than I can chew… Greed knows no bounds, but I am more than content with where I am at right now. I have absolutely zero desire to push my luck and strive for more assets!

With that said, today, I would argue that the current market landscape is much more suitable for speculators and traders… If that isn’t your cup of tea, no worries, there is absolutely nothing wrong with holding lots of cash and sitting on the sidelines; no, this doesn’t mean you have to liquidate all your assets either!!!

Just as is the case in my own situation, many of my investing buddies have simply decided to take SOME chips off the table and head on home… No doubt, they are still heavily invested in the markets, but they have shifted to a more conservative approach during these most tumultuous times…

Cash strong.

When you don’t know the direction of the markets, there ain’t nothing wrong with seeking out safety! For all the critics of ‘safe haven’ assets out there, you might be surprised to learn this —  Yes, it’s true, cash has outperformed the S&P 500, Nasdaq, and Dow Jones so far this year… by a wide margin.

Screen Shot 2016-02-21 at 8.54.02 AM

 

So, yes, cash is indeed king right now. And as I’ve always believed, when one looks at the return on investment (ROI) of cash, you need to focus more on opportunity costs than anything else.

 

Down the road, if wonderful investment opportunities present themselves to you and you’re able to purchase quality assets for pennies on the dollar, but have no dollars… what good is that?

 

The train will pull up at the station, you won’t be able to pay the fare, so it’ll just take off without you… And don’t think it’s just gonna sit there, waiting around indefinitely while you dash off to the closest ATM (e.g. Uncle Moneybags)…

 

At this point, I think it’s very clear to readers which direction I think the markets will be headed next…

 

I haven’t changed my tune at all, and I really strongly believe that we are just now entering the early innings of a most interesting ballgame.

 

I will leave readers with some interesting quotes from famed trader/speculator Jesse Livermore:

Top-Trading-Mistakes_body_Picture_4

CFN1NGvW0AAfTGf

 

BrSvg40IYAAS00z.png-large

 

B8mP9iYCUAATLtN

 

CNr8ulZWIAEKwTS.png-large

 

CHJLXrNWkAAw0nW

I know, I know, everyone LOVES to quote Warren Buffett (and I do too, sometimes), but like I’ve always reiterated on this blog — There’s a time and place for everything.

Life ain’t binary, so stop thinking in terms of 0’s and 1’s!

Obviously, I don’t have much faith in the long game right now, so I’m taking a slightly different approach…

And there’s also that very popular Wayne Gretzky quote…

1c9ccbcbbd145a4f2b93bafff48bf495

But I’ll leave you all with this one…

Justin-Mamis-Trading-Quotes

 

It ain’t easy out there right now… But I do know one thing — When it comes to investing, herd mentality seldom works…

 

So to all the realtors out there, please stop trying to sell me another property! There are no bargains left out there in the SF Bay Area. To suggest otherwise would be “peddling fiction”:

 

 

Fight On!

Print Friendly, PDF & Email
Sharing is Caring:

6
Leave a Reply

avatar
6 Comment authors
BeSmartRichJonNo Nonsense LandlordIncome SurferJC @ Passive-Income-Pursuit Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
MiningBookGuy
Guest

Another great article Jay! I especially like that last quote, I think this is the first time I’ve heard it! “The crowd is bargain hunting in what was; the knowing are buying what will be.” -Justin Mamis Never heard of him, but looking him up now. Deep, simple quote…I know we’re both trying to figure this out right now! While I have almost no experience in real estate or dividend growth investing, and I especially know real estate markets vary incredibly by region, I hope some of your real estate and stock market buddies take this article seriously. Come to… Read more »

JC @ Passive-Income-Pursuit
Guest

Really liked the “There is a time to go long. There is a time to go short. And there is a time to go fishing” quote. If we were in investment mode I’d be leaning much more towards building cash reserves right now. I typically run pretty much fully invested and have missed out on plenty of opportunities because of that. We’re working on paying down some debt and building up cash reserves, the patch is a bit shaky right now so I could potentially lose my job, but once we get on better grounds my plan is to build… Read more »

Income Surfer
Guest

Haha. Enjoyed the post Jay, and I hadn’t thought of the “Boy Plunger” since I read the book 5 or 6 years ago. I may need to check it out again. Of course, it’s worth remembering that he did kill himself after the great depression. Just another reason I don’t have the temperament to be a successful stock trader. Also cash strong at around 80% currently.

Keep hunting those bargains. I think I’m zeroing in on another one
-Bryan

No Nonsense Landlord
Guest

No one knows what direction the market is heading. It does make my past mortgage payoffs a bit more rewarding. My 5.5% is gone, and now my 5.375% mortgage will be paid soon. It’s better to just index invest. It’s not exciting, but works. Sell some covered calls to make it more fun and juice up your yields in a flat market. Remember, slow and steady wins the race, and no matter how much trading you do, someone is doing the exact opposite and think they know more. Rely on 130+ years of the market and sleep well at night.… Read more »

Jon
Guest
Jon

So for someone new to investing, you’d suggest that they hoard cash and wait to say, buy Index funds like Small Cap and S&P500? That’s been my goal for 3-4 months, but a lot of people are telling me since I’m going long, buy it now, don’t wait, and stop trying to time the market. The prices look ridiculously high though. I’m with Vanguard and I’m thinking of waiting to buy VBK and VOO.

Any tips would help

Thanks!

BeSmartRich
Guest

Love what successful investors and others say about the market and so true, it kinda feels wrong to be left alone. The herd mentality is really interesting and I really love making money from sticking to my long term plan. It has always worked and it will work here in the market.

BeSmartRich

Close Menu