No. of Recommendations: 5

What you’re essentially asking is a market-timing question, which is typically answered

Pardon the intentional mildly out of context snippet.

The question is not one of market timing. The question is a business question or a series of related business questions. When do we liquidate assets? When do we hoard cash? When do carefully buy? and When do we fill the cart?

A business is foolish if it keeps producing at the same rate when its market conditions change. To keep producing 100,000 widgets when the market conditions only sell 80,000 is a poor choice. To keep producing 100,000 widgets when market conditions can sell 120,000 and max production is 130,000 is a poor choice. I'm not suggesting there is instant knowledge of increase or decrease of demand but there is a feedback system. Ignoring the feedback is foolish.

Are our portfolios significantly different?

You have a business plan in place. Brewer has a business plan in place. I assume many others do as well. And it nags at me some times that we need to ensure that our business plans have at least considered if not adapted to changing conditions. (if you don't like the term plan, I have no issue with terms like sideboards, outlines, guidelines . . . ) One of the simplest tools in the tool box is cash management or percentage of cash held within the portfolio. Cash provides two nifty functions, it provides a soft landing when prices are falling and it provides dry powder for cart loading. Cash has its cost and as you consistently point out, holding cash or most C&E assets is a slow bleed of real purchasing power.

Market timing is a a bet, it may be an educated bet and is is still a bet. Studying the feedback loop is not a bet, it is business analysis. Business analysis is only half the equation, action in response to the analysis is the other.

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