In stormy seas, it’s good to revalidate what our true North is. One way to do this is by asking ourselves basic questions on how we think about investing & what that implies for how we should act now.
This essay is a lighthouse in stormy seas. I'd like to understand your approach on sizing the bets. How do we value strong opportunities relative to each other? Do we start nibbling at certain price points or bite big?
Hi Anand, Great write up as always. I am curious about one aspect of investing I don't think I have read your writing about. This relates to how much of one's holdings has to be in cash. If I may further articulate in a simplistic manner. If after excluding things like minimum emergency funds (6-12 months cash etc), I have a 100 dollars of investible assets and I further assume that I can ignore all asset categories other than stocks and cash, how should I think about how much cash I should hold. If I have reached my max threshold of stock holdings and I find assets that are attractive, I must sell something to buy another. As a practical matter, that would mean I don't have an infinite holding period. At times, it may also mean I have to sell just to increase the cash buffer. What principles do you suggest for deciding on cash buffers?
Outstanding as always! I wonder whether selling intelligently can be a meaningful priority in a sensible investment agenda?
Outstanding as always! I wonder whether selling intelligently can be a meaningful priority in a sensible investment agenda?
This essay is a lighthouse in stormy seas. I'd like to understand your approach on sizing the bets. How do we value strong opportunities relative to each other? Do we start nibbling at certain price points or bite big?
Hi Anand, Great write up as always. I am curious about one aspect of investing I don't think I have read your writing about. This relates to how much of one's holdings has to be in cash. If I may further articulate in a simplistic manner. If after excluding things like minimum emergency funds (6-12 months cash etc), I have a 100 dollars of investible assets and I further assume that I can ignore all asset categories other than stocks and cash, how should I think about how much cash I should hold. If I have reached my max threshold of stock holdings and I find assets that are attractive, I must sell something to buy another. As a practical matter, that would mean I don't have an infinite holding period. At times, it may also mean I have to sell just to increase the cash buffer. What principles do you suggest for deciding on cash buffers?