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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Difco who wrote (43892)	8/12/2011 12:48:06 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78480

re VW.D - the 20BEuro cash pile number is a little bit misleading - at least the way I look at it the 20B Euro cannot be considered net cash. I see current assets are roughly 87B Euro (including 17B Euro in inventory) and current liabilities 77B Euro for a net of 10B Euro - if you consider inventories not as an liquid asset (I don't) there is actually 7 B Euro in net short term debt. Hardly a problem but it's not like VW is sitting on a mountain of cash either. Also consider that they did a capital raise of about 4 B Euro in 2010 (for 65 Euro). annualreport2010.volkswagenag.com Overall I agree with you regarding VW.DE bullish outlook. I just hope with all that expansion drive that they find some Euro's for a generous buyout offer for MAN <g>.

To: Difco who wrote (43892)	8/12/2011 1:17:24 AM
From: Jurgis Bekepuris	2 Recommendations Read Replies (2) \| Respond to of 78480

Cash holders have been severely punished during the 1974(1983)-2000 runup. finance.yahoo.com^gspc;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined Sure you had downdrafts, but if you held KO or SPY during that time, you made out much better, while holding cash led to severe underperformance. By 2000 nobody even thought about holding cash. Looking at 2000-2011, holding cash was great for most of the decade. Especially if you held it in bonds - bonds practically outperformed stocks. Plus you had couple huge drops with no positive trendline for the market. finance.yahoo.com^gspc;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on So currently 100% stocks - 0% cash folks are pretty discredited. Market "timers", 80% stocks - 20-50% cash mixers and even 90%+ cash (gold!) bears have much more credibility than 100%-stocks folks. I am surprised we got couple of 100%-stocks bulls on this thread. ;) I guess they have not capitulated yet, they are not ready to throw in towel and so we are not yet at the moment when 100%-stocks will outperform everything for a long stretch. :) Personally, I don't give a crap about ideological arguments. My best example is last spring. I was forced to sell most of my portfolio due to account transfer. I was lucky to have sold just before summer swoon. I'd rather be lucky like this again than hold an ideological position that 20-50% cash is "market timing", not "value investing" or some other odious personal habit that should be shunned by gentile true investor's club. ;) If I had to summarize my approach, I sell when things are overvalued and hold some cash until they become undervalued. I try to "upgrade" my portfolio by switching to "better" securities on drops. I try to leave some powder dry. But I break a lot of these rules on various occasions. So sue me. :)