Risk tolerance is a personal thing. I wasn't passing along ideas, Mike....just responding to your request for comments about yours.
In general tone, what you suggested seems quite the opposite of what I am doing. Selling a known Gorilla when it's down seems to me like a good way of mucking up a good thing, especially if one knows or feels it's coming back. (I have vivid, recent experience which demonstrates this.) If on the other hand you know or feel it's not, then that's the reason to exit.
1)The book suggests buying the pre-tornado basket. We here are not practicing that for the most part. How many posts have you read of people "selling junk", "down from 10 to 3", and similar? We're mostly playing Russian Army, and it's working!
2)If you are moving into a second Gorilla (not clear in your first post) to improve performance because the first is limping, well and good, for well and good reasons. Some here are wearing track shoes(Q), some have switched from sturdy hiking boots (MSFT).
3)It seemed to me your senarios both produced fewer profits, especially so if the Gorilla isn't really limping.
4)Doubling the S&P for 10 years is no shabby result. I could do with that, but I could do with 3X my money each year for the next 10 also.
For a lot of my investing years, the most volatile part of my equation was me. Shedding that has been a very big help. |
