Let’s Assess The Damage

The market is ugly right now, but if we’re to be honest with ourselves, we’ve been overdue a selloff for going on 15 straight months now. Actually, we don’t even know that we’re getting a real one yet. I suspect we are, but that’s sort of the great mystery here isn’t it.

I have 25% cash still, a far cry from the 50% I had just back in January (and admittedly visually bad timing), but why should I panic just yet? I’m (was) +14% for the year. And if I had been more defensive, can you really argue I’d have been better off?

Check out BAS, up a whopping 61% so far this year, then tell me I should really have been holding more cash. As it was, I sold off exactly the right assets while holding onto what needed to be held – via pure dumb luck of course.

And because this timing is just luck, if I panic and raise cash back to 50%, as far as I’m concerned I’m more likely to miss out on the next big move in my assets. If there’s anything that BAS or HCLP has taught me, it’s that my research is solid and my hand is hot right now; and those fruits can come to bear at any moment, with or without me.

So I’m inclined to sit back, be patient, and hold the position that the real cautious move on my part is to be afraid of missing out on the upside, not of participating in the draw downs.

In the meantime, I’m going to watch PGJ get battered to ribbons, clutching my put option lottery tickets like an addicted gambler.