Talk of The Villages Florida - How do you invest in a down market?

Talk of The Villages Florida (https://www.talkofthevillages.com/forums/)

- Investment Talk (https://www.talkofthevillages.com/forums/investment-talk-158/)

- - How do you invest in a down market? (https://www.talkofthevillages.com/forums/investment-talk-158/how-do-you-invest-down-market-319337/)

Quote:

Originally Posted by DAVES (Post 1940692)

HUH? You expect to find answers to this question on a website?

Oh and as confirmed in this post, no one cares what I think.

I care what you think. In fact it speaks to your question above. No, I don't expect to find "answers" as in "facts," necessarily - only opinions and conversation.

I agree - I wouldn't consult a website for answers to important questions. Just can't trust 'em.

Quote:

Originally Posted by manaboutown (Post 1940837)

Back in the early 1980s I bought a handful of Berkshire Hathaway shares at around $3,000 per share. It was before class B shares were offered. Just dumb luck probably, but I had read about Warren Buffett's track record and thought I would give it a go. I had little cash to invest back then but I put some of it into BRK. Glad I did is an understatement!

Those shares have grown to be about 1/3 my stock portfolio and all I do is nothing yet benefit from people far smarter and capable than I am in the stock market.

Given his track record do not understand why anyone would criticize Warren Buffet.

Well maybe cousin Brucie would find fault with him not buying some reverse mortgages.

Quote:

Originally Posted by Stu from NYC (Post 1940896)

Given his track record do not understand why anyone would criticize Warren Buffet.

Well maybe cousin Brucie would find fault with him not buying some reverse mortgages.

To reverse or not reverse, that is NOT the question!

Over the years I have read anything I could find on Warren Buffett. Charlie Munger has been an often overlooked driving force beyond Buffett's ever evolving extremely successful investment strategies over the years IMHO.

The other guru from whom I greatly benefited is William Nickerson whose first book "How I turned $1,000 into a Million in Real Estate in my Spare Time" I picked up during my lunch hour at a Brentano's in D.C back in 1966. I immediately put his ideas into practice. That book literally changed my life!

Quote:

Originally Posted by manaboutown (Post 1940903)

Ever read Buffet's book. Fascinating.

Agreed that Charlie Munger does not get enough mention.

Quote:

Originally Posted by l2ridehd (Post 1940230)

For the past 35 years I have used a very simple investment plan. I use index funds, total stock market and total bond market, total international stock and total international bond funds. 60/40 asset allocation. 42% TSM, 18% TIS, 28% TBM, and 12% TIB. I rebalance to those percentages at least once a year or when the markets change a lot. So I am always selling high buying low in any market, up or down. I use Vanguard funds because of the low expense ratios. I have beat the S&P 500 for the 35 year average with significantly lower risk. It’s very close to how the Yale University’s endowment fund is managed. Works very well in up or down markets. Your losses are always less in a down market and you recover faster in an up market.

l2ridehd,

I wanted to let you know that there is an article running right now on npr.org about David Swensen
who managed Yale’s endowment. Swensen recently lost his battle with cancer. He was 67.

The NPR article (also a 4-Minute Listen) on the site is titled “David Swensen, the Greatest Investor You Maybe Never Heard Of, Leaves A Powerful Legacy.”

The article said, about Swensen’s philosophy, “Basically, he built a table with 10 legs: Very stable, even if a few legs get wobbly or fall off.” — That’s pretty much what you said, l2ride. :)

Even though Swensen had a PhD in econ, he sometimes hired people to work for him who did not have a background in finance. (I liked reading that. Kind of like what Buffett said in one of his many quips: “Beware of geeks bearing formulas.” Remember — Buffett said early in the derivatives game that those things were weapons of mass destruction.

The derivatives time in the market, which most of us here remember, sure was the classic example of the saying, “Unrestrained greed is not only bad morals, it’s bad economics.” (I don’t know who said that one first, but I understand it and believe it. “The Big Short” perfectly captured that insane fever.)

With Swensen and Buffett both, it sounds to me — (simplified version) — like they know that math + the human touch of good sense and an awareness of the effect of human behavior on the market— along with a solid philosophy and long term goal — works.

Anyway, thanks for mentioning the Yale endowment. Ironically, I then saw the article about Swensen.

Also, thanks for sharing your view on holding a combo of Vanguard funds, having done so for decades. Sounds like you built your own “ten-legged table.” People who have been solidly and sensibly investing for decades are pretty much vaccinated against market ups and downs.

Boomer