Wow... I hit a nerve...
posted by: bones1420
This was posted by Bones 1420...10 bagger, seriously, you raise a good point. In 1987 when interest rates were 10%+ pr annum, dumping stocks in favor of cash seemed a legitimate maneuver...but in today's market, with interest rates barely 2% pr annum, "cash" (altho prudent) does seem the least lucrative position....and this exclusive of the dollar's continual decreasing in real-value.
p.s. I'm currently adding ULTR...high bid on WEGI...and desire to know if you are officially pounding the table on VM-GOOG? lol
BONES My reply..
The point that I was trying to make was that as a sector trader I have made my bed in oil stocks... As I have stated before I think that we are out of the speculative stage of the oil market and DD is needed on the positions that are kept.. Hence I sold any oils that even had a hint of being pumped...This created cash...As most positions are not marginable I don't have my usual hedge in place... At the end of last week I posted my largest positions and they have not changed thru today...If I believed oil was going to 30 or the Dow was to plummet I would short QQQQ or SPY as a hedge... I do not believe this is the case and sitting on cash to me is the same as sticking my head in the sand... So what I have done is buy the highest Beta stock avail.. and call it cash as a joke... The joke is up over $14,500.00 since I said Cramer made me do it.. No I am not pounding the table on any stock other than ACRG and ASPN...Certainly not GOOG on which I keep a 1 1/2 % stop which I posted earlier..
Posted by: MSGI
Hank, you are entitled to your opinion no matter how warped it is.
Your post is hard to figure... Last week you thought I should command $5,000,000 a year as a portfolio advisor and today you consider my opinion warped... That is your opinion,,, but if you are loosing $1000 to $2000 a day on your position which is only 10% invested according to you, mabee you could use my advice... If you really think that the market is fast going to hell ,,, short something or at least short against your own to box to stop the bleeding,,,, If you sit in cash you loose the investing perspective of true value...I wish you luck and hope when you find your pot of gold at the end of the rainbow my bid was 0.01 above yours and I bought all the spoils... Or was that your bid today at 2.31 on SOTK today, A penny above mine..
Posted by: SSKILLZ1
10 bagger, I have several issue in what you said today & yesterday night with google so here goes.
1) Google is equivalent/even better then cash? Google is trading at a very high PE, which is well deserved I might add. But it has it risks and could go down 10-15 point on a bad selloff day in the market. For the long run, nobody would dispute putting you money in Google is a better investement then putting your money in cash, but to compare it as the same as cash is wrong, because no matter how safe you feel in any stock is has many more risks then cash, hence the reason why we get more reward investing in stocks (in theory).
2)Google 22% of your Portfolio? Now I'm not going to compare an OTC company such as PDGE.ob to GOOG, because over the counter stocks come with more risks. However PDGE.ob is experiancing some pretty explosive growth and currently is trading at a trailing PE of 7, Google is much more expensive and it should be. However, the point I'm trying to make is I'm very confident in PDGE.ob long-term prospects so much so that even through the decline it remians by far my #1 position, and if it falls more I'll pick up some more shares because the price is getting ridiculous in my opinion. However, it will never reach 22% of my portfolio, nor will any other stock, because regardless how good it looks, there is always the risk that you missed something, and with stocks priced to perfection like Google they are dangerous, because even a good quarter might not be enough to get a radical price rise.
3) Google a Value Microcap? we will put the fact that it isn't a microcap asside, because by rule it doesn't matter what the market cap of the stock is on this board. But value is defined by the board as a low PE and I'm struggling to define Google as a low PE stock, because even if they earn $6.00 this year which I see as possible even though analyst expectaions are much lower then that the stock would be trading at about 38 times foward earnings on my extremely lofty estimate, which they can easily miss. Having said that, I will give you this it can be defined as value if you compare it too Yahoo, and probably should trade at 250+ by year end, but from my interpretation of the rules this isn't how value is defined on this board.
4) Large Cash Position Reflect indecision by investors? This is the one I really must say I totally disagree with. If you feel the market is going to plummet like Len, to be fully invested in these times could tell us certain things about the person, or things that person is missing. 1) The reason why I don't short is because over the long run you are going against the grain, and it is very hard to be successful at anything by doing that, it doesn't mean that you can't be successful shorting or buying into a market that is dropping through the floor, it just it that more dififcult to do it. 2) Any person who overlooks that point has to be a little arrogant to beat the market, and I'm no exception to this I believe the market is going to tank like len and probably should be in a higher rate of cash then 52%, yet I'm very arrogant to the point where I think I can find stocks that at least won't go down in the market (what can I say after all this, I'm not a cash fan, but i realize the advantages of cash when you believe the market is enter tough times!) st3) Lastly, large cash position do not reflect indecision on the case of this board, but rather symbolize the conviction and the humbleness each investor has in the belief where the market is going in their opinion, and how should they execute an investment rategy that concurs with that opinion.
--Of course this is just all my humble opinion, and all opinions are subjective in nature, so who really to say whos right and who wrong on this one.--
Yours is the most rational responce... Large cash positions make a statement that you think the market is going down... If thats what you believe put out a short... If you believe that all stocks will fall and you will be able to pick a bottom,,,Each down tic will reinforce your opinion of doom and at the very time the shit hits the fan you will believe all goes further to a bargin basement prices... If you had shorts out in an index that stopped falling you will have advance knowledge of when MV's bottom as they lag in down markets...Your foot at least will be in the door,,,It's hard to make decisions in down markets,, Especally when you do not sector trade.. This is your Quote...
" Lastly, large cash position do not reflect indecision on the case of this board, but rather symbolize the conviction and the humbleness each investor has in the belief where the market is going in their opinion, and how should they execute an investment srategy that concurs with that opinion."
This statement shows great investment ability and thought,,, but just think if thats what you really believed what a index short would do for you if you were right...
For the Record let me say GOOG is not a micro cap but neither is CASH and for now thats where my cash is...
Posted by: lentinman
GOOG: "Since I think GOOG is a VM..." Possibilities:
1) You are on drugs. hank(no not even close)
2) You were joking. hank(that Cramer made me do it}
3) "M" stands for Megacap. I'm still working on the "V". hank(As the sheriff are you redefining the board)
4) Your other 78% is in XOM and GE. GOOG is VM by comparison. hank (no you must be joking as I post on the end of the week my total positions]
Obviously GOOG isn't in the same hemisphere as VM's as discussed on this board!! Not just with respect to the M (market cap), but the V (very expensive in terms of PE).
Does it violate the rules? No. Because we don't have rules about market cap and the only rule is earnings. Is it appropriate for the board? Obviously not. I wouldn't have even said anything, but when I hear "Since I think GOOG is a VM..." ???? I really didn't think I had any choice.
CASH: I take it your comments were directed at me. I could just say, "What SSKILLZ said." and leave it at that. But, that wouldn't be me - now would it?
1) Cash is the best position IMO. It is just an opinion. hank(Cash is not a VM and does not qualify as a position on this board,,Call the Sheriff)
2) Cash IS a tool. You are right. At times, cash is king because the market is overbought or overextended or poised for a correction - or a cyclical bear is in waiting. IMO. hank(Shorts coverted to cash to positions are a tool)
3) "Having a majority of one's position in cash helps insulate true investment ideas from any decision or purchase." Your point? When you believe (as I do) that the MACRO investment decision should be based on a declining market, then having a majority position in cash is ABSOLUTELY the right thing to do for the VERY REASON that it DOES insulate me. But, contrary to your inference, it does not insulate me from "true investment ideas", but rather insulates me from an investment mentality (emotion) that I don't want to be associated with in a bear market. That emotion is to see everything as oversold and cheap and to jump in with both feet. hank(What I am saying is that your hording of cash and believing that you are right keeps you from pulling the trigger on some great buys)
4) I don't use short positions (YET) for reasons I have explained several times. I'm not going to go into those again without more reason. But, I agree. It is the same form of insulation... the insulation I WANT. hank(To each thier own)
5) "Large cash positions are, in reality, a measure of any investor's indecision to execute a proper investment plan." WRONG! I have a VERY SPECIFIC investment plan. I will wait until the next cyclical bull market begins. I will be ready with tons of cash. You won't be. I will not have lost a ton where the sinking tide drops all ships. Odds are you (and all fully invested people) will have (unless you trade constantly) IMO. I don't trade constantly. hank(If you are right odds are the very stocks that you buy will take a generation to sell and Interest rates will be your main competition...)
Len The reason that I posted was because I really do find KOS posts not only amusing but thought provoking... If he gets under you skin it is only a reflection of the missed opportunities made by being in cash... Stocks that go down are not always bad investments in time frame of 2 years and stocks that go up may be bad investments 15 min away... Every VM and small cap stock is but one press release away from a 50% haircut... GOOG if it goes down 20 points is but 10% and with a 1 1/2% stop I feel ok about my cash position....
There are only 4 things in life that matter. The first is happiness and I'll sell you the other 3 for a dollar.
- Sam Walton
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