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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: _scar_face_ who wrote (27396)	1/13/2003 9:19:54 AM
From: GraceZ	Read Replies (2) \| Respond to of 74559

The glitch though for some, is those who continually think they've distinguished themselves from the flock in their thinking. They eventually come to learn the difficult lesson(s), that in the end, they were no different than the ones they thought they were not a part of. Oh for sure, over and over I bring up the issue that trading has a negative expected return yet traders always think that they will be one of the ones to beat the odds. It's like all the ghetto kids who think they will be the one to grow up to be an NBA star. Then there are the people who play the lottery instead of making some fundamental change in their life that will help them have a decent living. Instead of going for the high probability lower yielding result they forgo that to try to hit the big jackpot. That said, there are times to be completely out of the market and over the last few years there were several occasions when I was 100% cash or mostly cash with some bonds and gold. This is not the time to be out of stocks. You would know this if you were long a basket of stocks. If Sir John is 100% cash and bonds then I'd have to say at his age and his wealth, it makes sense. For myself, I don't risk 20% to make a possible upside of 10%, which is what the risk reward on bonds is at this point. If I'm going to risk 20% I want to get paid a possible upside of 100%, at the very least. Last year it was a better scenario. You risked 5% to make 20% and there wasn't much to lose being out of stocks. If you think bonds are safer than stocks you've never been in bonds when they blew up. When rates start to rise you can't get out fast enough to preserve principle. Just choosing something non-callable isn't the only thing you have to worry about either. Just wait 'till we have a few munie blow ups. It's inevitable at this point.