Stock Market/Investing/Fin Planning Catch-All

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nrsair said:
Freeing up capital for his successor IMO. He’s 94 years old.
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No. I've never heard of that. If he thought his holdings would do well, then he would hold them and let the successor free up the capital if that's the prudent thing to do.

Warren Buffett knows what's up. The stocks that he likes to invest in are going to get hammered.
 
I agree that Buffet wouldn’t call capital if he felt the holdings were priced at a beneficial level to BH just to provide his successor with dry powder. My assumption is that their technical and fundamental analysis and whatever other proprietary valuation models they use show the market is overvalued. It probably was before the election but almost certainly is now that it’s 5% higher. And to be more specific, their holdings are overvalued. And perhaps other investments are undervalued. That seems to be the BH way - value investing.
 
nrsair said:
Freeing up capital for his successor IMO. He’s 94 years old.
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BH has plenty of free capital. The company I worked for prior to retirement was acquired by BH. They were constantly after us to identify acquisition targets in our niches. They were looking for places to deploy capital, it's not like working with a private equity firm who uses debt to buy up companies. BH pays cash.
 
I wish I understood any of this. I'm too close to retirement to suffer another recession.

I was looking at my 401K last night and I don't have a lot of good options outside of stocks.

All the bond fund I have are around 2-4% average return over the past 3, 5, 10 years. But that would probably be better than a nosedive in the markets.
 
UNCatTech said:
I wish I understood any of this. I'm too close to retirement to suffer another recession.

I was looking at my 401K last night and I don't have a lot of good options outside of stocks.

All the bond fund I have are around 2-4% average return over the past 3, 5, 10 years. But that would probably be better than a nosedive in the markets.
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Ignore the noise. Panic selling because your preferred political candidate lost is a bad behavioral mistake in personal finance.
 
UNCatTech said:
I wish I understood any of this. I'm too close to retirement to suffer another recession.

I was looking at my 401K last night and I don't have a lot of good options outside of stocks.

All the bond fund I have are around 2-4% average return over the past 3, 5, 10 years. But that would probably be better than a nosedive in the markets.
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In Feburary I have to change my "life savings" from a 5.1 % "CD" I am way too dumb to know what to do with it Right now it is basically equal to Soc sec-so it is a big deal for me-like 25% of my Net income. I save every penny of Soc Sec and this income for "inflation" and Nursing Home care . If they offer me a 4% CD I guess I will take it?
 
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UNCatTech said:
I wish I understood any of this. I'm too close to retirement to suffer another recession.

I was looking at my 401K last night and I don't have a lot of good options outside of stocks.

All the bond fund I have are around 2-4% average return over the past 3, 5, 10 years. But that would probably be better than a nosedive in the markets.
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jlcollinsnh.com

President Trump and the future of stock returns

Since last Wednesday, depending on your political leanings, you have been celebrating or in mourning. Or maybe you greeted the news with indifference. Now, as the dust settles, you might be wondering what this all means for your portfolio. Love him or loathe him, Mr. Trump is a disruptive force...
jlcollinsnh.com jlcollinsnh.com

Here is a good quick read from one of my favorite authors in personal finance, JL Collins. Hopefully it helps to reassure you.

Jack Bogle, the founder of Vanguard and essentially the father of modern day index fund investing, had a great line, “don’t just do something! Stand there!” It’s a great mentality to have when investing for the long-term.

We’ve had the greatest bull market run in history over the last decade or so, spanning different presidential administrations and different political parties in control. At some point there will be a major correction and a bear market. Just have to expect that, and understand that there are great buying opportunities. As long as you are able to protect yourself with some bond positions to go along with your equities, you just grin and bear it and ride it out. I have been in 100% equities for the last eight years or so since I have really begun my personal finance and investing career in earnest, and plan to continue to do so for another 10-12 years until I am well into my 40s. Obviously each individual investor has their own risk tolerance and their own time frame for when they need their money so everyone has to adjust accordingly. But overall, don’t panic, whatever you do; the markets have survived and thrived through all sorts of prosperity and adversity.
 
CFordUNC said:
jlcollinsnh.com

President Trump and the future of stock returns

Since last Wednesday, depending on your political leanings, you have been celebrating or in mourning. Or maybe you greeted the news with indifference. Now, as the dust settles, you might be wondering what this all means for your portfolio. Love him or loathe him, Mr. Trump is a disruptive force...
jlcollinsnh.com jlcollinsnh.com

Here is a good quick read from one of my favorite authors in personal finance, JL Collins. Hopefully it helps to reassure you.

Jack Bogle, the founder of Vanguard and essentially the father of modern day index fund investing, had a great line, “don’t just do something! Stand there!” It’s a great mentality to have when investing for the long-term.

We’ve had the greatest bull market run in history over the last decade or so, spanning different presidential administrations and different political parties in control. At some point there will be a major correction and a bear market. Just have to expect that, and understand that there are great buying opportunities. As long as you are able to protect yourself with some bond positions to go along with your equities, you just grin and bear it and ride it out. I have been in 100% equities for the last eight years or so since I have really begun my personal finance and investing career in earnest, and plan to continue to do so for another 10-12 years until I am well into my 40s. Obviously each individual investor has their own risk tolerance and their own time frame for when they need their money so everyone has to adjust accordingly. But overall, don’t panic, whatever you do; the markets have survived and thrived through all sorts of prosperity and adversity.
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Normally that is true but it did take 25 years to recover the losses from the 1929 highs. That would wreck anyone who was anywhere near retirement.

Given, if that was preceded by gains similar to those in the ‘20s, your portfolio would probably be in tremendous shape before the crash.
 
I said before on another thread, a correction is coming, and will do so regardless of who wins the WhiteHouse. Will it be as bad as in 2008?
I like the idea of going with bonds in the interim… until after the correction. Or perhaps wait and see if Musk is allowed to crash the US economy as he said… then I guess we can all rise up out of the ashes like a Phoenix?
 
I do think the primary tailwind the market has is the amount of capital in cash right now. Look at the money supply due to COVID relief measures:

fred.stlouisfed.org

M2

View data of a measure of the U.S. money supply that includes all components of M1 plus several less-liquid assets.
fred.stlouisfed.org

That money has to go somewhere. You know how shit rolls downhill? Money goes uphill to assets. A lot of it has been parked in cash paying 4-6%. Those yields are decreasing. The other three common places to place your money - equities, real estate, crypto - all appear to be overvalued, but that money has to flow somewhere as money market yields drop. I think part of this is that the increase in money supply has fundamentally increased the value of assets.
 
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No one knows what will happen but we are due a pull back/recession. It's actually the best way to curb these high prices,,,stop spending money.

Regardless I keep some of my money in safe conservative funds but the majority in index funds. I doubt I rebalance unless there is a major pull back then I shift my conservative into more aggressive funds
 
I'm an old codger so my investment strategy is fairly simple which is to preserve capital. I have no FOMO impulses.

I have held a portfolio of dividend kings for 40 years with a ( cost basis ) 25%/yr dividend payout.
I hold no bonds. Instead, I use my Roth IRA money market investments as a tax free muni bond proxy that had been paying me 5.25% interest until the recent Fed rate cuts. Today, the yield is down to 4.52%.

Depending upon how Trump's economic policies will impact the Fed's decision on interest rates and the economy more generally, I may or may not keep my hefty cash position where it is, but for now I think cash is still king;)

As Ford mentioned in his post above, I'm a "don't just do something, stand there" kind of investor
 
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