Hi Jim, I have a second question.
Based on my guess about the market, which is not that different from your guess, should I place a bet, take a gamble, wager a speculation, and make an investment in line with the greater crowd, or against the crowd?
Before I answer my own question, I first state that, investment and speculation are the same, regardless of asset class and timing horizon. There may be differences in nuance, but these are not worth our time to consider.
I also state that, given the current valuation abnormality relative to historic averages (convoluted way of saying ‘still high’, and yes, I am even beginning to talk like you know who at the FED), the greater crowd is still wagering that the ‘New Ec Tech’ will recover within a reasonable time period, possibly producing (at least) an average (fill in your own expectation number) 10-11% per year return over the next (fill in your preferred number, possibly years to intended retirement) 10 years.
My answer is “I will put in place some unpopular speculation positions, and make some solid investments in line with some greater segment of the population.”
Why do I answer this way?
On the market’s flight path, I do not know, cannot know, and neither does anybody else know. I can guess, but I may guess worse than a lot of more astute and/or luckier guessers. Guess I must, and then decide on an allocation, place a bet, take a gamble, wager a speculation and make an investment. I must do so because even if I do not, I will have done so anyway.
I am involved in a game where I do not make the rules, which can none the less change on me without notice; I do not know the future; I may lose big with more certainty than I may win big; and yet I cannot quit, until I go to heaven, unless I go to hell.
To put in another way, I have to play, I am not likely to win, I cannot quit, and then I lose anyway. What a fun game.
Well, for now and forever, I want to play in such a way that I can afford to be wrong, and do not have to be right. For now, but not forever, I want to play to not lose, as opposed to play to win.
So, what is it that I do know for sure?
I know my financial circumstances for sure, and my risk preference generally.
Chugs, Jay
A question
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