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Stocks B / Berkshire Hathaway

URL:  https://boards.fool.com/what-makes-you-think-that-the-coming-collapse-of-34733852.aspx

Subject:  Re: Berkshire doing wonders for my portfolio Date:  1/27/2021  6:59 AM
Author:  mungofitch Number:  259540 of 261876

What makes you think that the coming collapse of the bubble requires a trigger? Even with the benefit of 20-20 hindsight, nobody can explain what happened in March 2000 to cause the NASDAQ to start the collapse. The same is true of the crash of 1929.
What makes you think that you have the ability to hang on until the bitter end but still bail out in time when you're competing with millions of others plus AI bots that never have to go to work, eat, sleep, shower, use the bathroom, etc.? I don't know about you, but I know better than to think I have a chance at playing this giant game of musical chairs.


Like long term buy and hold, I've found it's one of those things that doesn't require any great skill, just patience.
I don't care about a trigger. Prices will change of their own accord at some point.

In 2000, the market indexes topped in March.
I gave it a a few weeks, then a few months, to be sure the top was past and the enthusiasm was waning.
There is no need to spot the top tick, or the top week, or month, or even season.

I took some short positions starting September 25 2000. (mainly a US bear mutual fund)
I traded too much, sold some of the positions way too early, and I held some of the bearish positions much too long, even bought some after the bear in 2004, and gave back some of the gains I made.
So my ability to predict and time or price the market was sketchy at best.
But I still cleared a profit in the high six figures.

Short term price movements (in which I include bull/bear cycles) are vastly larger than long term trends.
The only argument against trying to trade those movements is they are generally way too hard to predict.
It's a good argument.
But...maybe not always?
Did anybody think prices were crazy in 1999-2000?
Was the subsequent big price fall really very surprising?
As noted above, one didn't have to be very good at all about picking the top to make a good buck.
In the same way that doing well buying stocks in a bear market doesn't require picking the bottom.

As you note, simply steering clear of bubbles is entirely reasonable.
There is certainly no obligation to try to trade anything shorter term, on the way up or the way down.

But there's nothing wrong with looking at the opportunities available.
Sometimes there is a simple, clear, honest and respectable way to make money with high reliability that isn't something you've done before.
Mr Buffett is a master of that. I'm not, but I'm willing to broaden my horizons occasionally.
Maybe the current bubble with present some opportunities like that. Maybe not.

Jim
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