Hello Ray, <<diversification>>
… I am diversified in that I have a balanced portfolio, about equal weight in the AUD and CAD-space on overall gross asset allocation basis, double weight in USD/HKD (it is my home currency, after all), and garnished with a dash of Euro, a splash of Yen, a dusting of NOK, and a sprinkle of DKK.
<<Jesse Livermore on the art of speculation, it's important to put your few eggs in one basket. And then watch that basket very, very closely>>
… I am concentrated, as Malcolm has pointed out, in natural resources and non-USD currencies (including gold).
<<I'm wondering how you can possibly keep abreast of the news and nuance of the dozens of disparate markets you seem to be dabbling in?>>
… I read, I converse with folks, and I stay true to the code Message 19601505 , trusting others to make mistakes when the chips are down.
<<In each and every market that you participate in, there are other traders who are spending their entire concentration and focus on just that one slice of one industry alone.>>
… precisely, and I depend on them to be blindsided in their blinding focus and ignorantly narrow concentration.
If superior information is what gives the winning edge, how can you possibly compete with specialists when you have only 1/20th of your time to concentrate on any one tranche or dollop?>>
… This is why I stay away from manufacturing companies, and I avoid, as much as possible, trying to pick winners in any given industry, and so I tend to go with the number 1 and/or 2 of any industry I park my money in.
<<As Warren Buffett so brilliantly put it, when entering a market, the first thing you need to ask is who is the designated sucker. If you can't say who that is, it's you.>>
Perhaps I am one of the dumb bunnies at the wolves’ powwow, but I only need to be the fastest of the dumb bunnies when the powwow gets underway.
Here are some of my earlier posts concerning the subject we are discussing:
http://www.siliconinvestor.com/readmsg.aspx?msgid=13964522
<<June 28th, 2000
The 12 Trading Axioms
1. On Risk, if you are not worried, you are not risking enough; always play for meaningful stakes and resist the allure of diversification;
2. On greed, always take your profit too soon; decide in advance what gain you want and when you get it, get out;
3. On hope, when the ship starts to sink, don't pray, jump; accept small losses cheerfully and as a fact of life; expect to experience several while awaiting a larger gain;
4. On forecasts, human behavior cannot be predicted; distrust anyone who claims to know the future, however dimly.
5 through 12 for later. We here on 9984 thread violated #2 and #4. What fun.>>
http://www.siliconinvestor.com/readmsg.aspx?msgid=16230199
<<August 18th, 2001
… You should know that, for folks in Hong Kong, used to having two operating businesses, two investment philosophies, two cellular phones, two credit card billing addresses, two dinner engagements in one night, two spouses, and two definitions of long term, are very, and simultaneously adventurous/cautious, optimistic/cynical, and somewhat mischievous, though with an altruistic bent.
Unlike the average J6P, we tend to mix business, pleasure, investment, speculation, money, fun, capitalism, communism, and astrology all in the same salad bowl. We do not mistaken luck for genius. I have been lucky, and that is all.
…I can also state that <<terror>> for us in Hong Kong is a terribly enjoyable state of mind, desired, sought after, cherished, and to be taken advantage of.
Cultures are different now that I stop to reflect a moment. In HK, we often are justifiable told we are insane.
Now, 20/20 forward looking, I am ready for a long winter of about 24-36 months in the real world where events simply not that bad yet, and a 'bottoming' hopefully within about 12 months in the financial world where events are still more than tolerable now.
I generally aim for 11% return year on year ...
My point of staying in cash is that it is maximally flexible, as it crouches in a dark corner, scoping through the rifle attachment down at the melee on the plain below.
I am willing to move that cash around as I deem cautious or adventurous.
I think over time, you will find that I am a speculator at heart and a risk-taker in the genes".
If I am not worried, I am not betting enough, and so better double up.>>
http://www.siliconinvestor.com/readmsg.aspx?msgid=16086949
<<July 17th, 2001
<<… confused mind … "no" … cower in a huddled position within a shadowed corner hutch, scoping down at the great plains below>> is exactly how I feel. I feel confused, and worse still, I feel uncertain. However, I sense trouble, and I do trust my instinct, because it has served me well through situations that others are fortunate enough to not have to bother with.
<<I have no confusion in the current international financial, equity, political, military, technological, demographic and climatic conditions>> and this makes you particularly dangerous to yourself, because blips, bumps and butterflies taking off can be indicative of some nasty pending earthquake or storm coming our way, and not of the inconsequential proportions.
I do not need to comment on wars, because you know better and you know me better.
<<I spend hours each day … crystal ball … identify threatening pixels emanating from cyberspace and trying to clear the confusion in my mind about what the heck is going on. If I really had it figured out, I'd be out enjoying some pleasant 3D somewhere [not here due to inclement weather today]>>
Well, we all spend a lot of time on trying to understand the issues, because the stakes are high, and we are worried, whether we are in the equity market or not, and because we will all lose in some fashion if the butterfly fluttered for a good reason. If we are not worried, we do not have a large enough stake at the stake.
http://www.siliconinvestor.com/readmsg.aspx?msgid=17325809
<<April 12th, 2002
… The end for the faith is nearing, and it will be checkmate in three moves, even as the officialdom targets a draw in five while forecasting a win in two moves.
We do not need to fuss over the insignificant math problem of GDP, productivity, hedonics, unemployment, inflation, deflation, stagnation and devaluation. Never mind the purity of the pool of funding or the source of replenishment. We simply sense something is terribly wrong or at least not all together right.
I am concerned, not worried, excited, not despondent, cautious, not paralyzed, for anything is possible tomorrow. This is optimism.
Chugs, Jay |
