Losers Average Down Try Averaging Up

The concept of averaging down in the market or on a specific stock you carry was probably coined by economists who can lose you serious capital. Try averaging up in your winning picks. If Goldman Sachs or Apple are bouncy pieces of paper, chances are there’s a good reason for such buoyancy. 

My rule in the market is never go out to lunch. At least be at your desk when your overweighted holdings drop a bunch of points or bounce as much. Look out United Airlines just posted a 9% stutter step. Life as a money manager carries a syncopated rhythm.  No Viennese waltzes play on and on. 

Our President is such a virile force impacting the Big Board, that nobody should run leveraged portfolios. Otherwise risk being buried. This is just over 60 years of investing speaking out. 

I don’t know the proper percentage to be invested, but it’s not 100%, not even 50%. I’m at 30 % and would go back to 50% only if I sensed Trump and the Federal Reserve Board would be working to make me rich. Yet, I don’t believe they care about enhancing my net worth. I’m just a number. 

This has been the case with a long line of FRB chairmen. Let’s face it, I’ve seen 13 percent interest rates in our time. Remember McChesney Martin taking away his punch bowl?  I stood too young,  fully leveraged,  when capital was costing me 9 percent. You’ve no idea how pressed you can feel with outstanding loans at 9 percent, callable overnight. I’ve learned how you can be pressed too hard when the underlying paper you hold is losing its investment quality.

I miss the good ole days. I served in the Korean War and bought the best pair of skis I could find to schuss the slopes in Japan’s northern island, Hokkaido. I’m 94 years old but still miss the wind in my ears schussing downhill to the bottom, intact. 

Let’s say I’ve captured more wealth than needed to live comfortably in Palm Beach or elsewhere. Why not bid bye-bye to wealth management?  Shouldn't I tear myself away from doping out the Big Board? Obviously, the answer is in the affirmative. It won’t ever happen. Since my twenties, the NYSE remains my playpen. I’ll always try to dope out whether Goldman Sachs is the best financial services stock to own or whether Apple can maintain its primary in cell phones. What is the best banking property to own with the least risk? Can airlines be a recovery group? 

Am I right to ignore energy stocks? What ethical drug house is ready to muster new product momentum? And what about Amazon and Microsoft? Whose music stops while others play on? 

My grown children probe me with questions in their eyes. Should they stick 25% long? My response to such 50-year olds with advanced degrees and over 10 million in liquid assets is, never take the ultimately extreme position with your invested assets. Always retain reserves at hand to pivot up or down. 

Consider, local authorities are restricting traffic on my road which is also Trump’s road. He’s throwing a dinner party where you ante up a million bucks for a seat at Mar-a-lago. 

We attended a Trump dinner years ago as a guest of an invitee. Sitting across from Trump’s wife, I noted that she didn’t talk at all. Later, I learned she wasn’t allowed to talk. 

Soooo….. Is Trump’s wife still held to silence? Was Hitler’s consort allowed to say something before she swallowed the cyanide capsule handed to her? 

Interesting concept that your life can resort to draconianism even on the peak of the social ladder. The old-fashioned phrase is come-uppance. My sense is Trump has years to go still unchecked.