Sunday, April 20, 2008

Sunday is for Summing Up

Reading Warren Buffett's homespun homilies* concentrates my mind as I try to crystallize what, if anything, I've learned since last year.

I've learned that it's easy to go completely to cash, but hard to capitalize on it.

I've learned that it's possible to time markets and stocks, but it takes more time than I have to spend. Also, I may not be emotionally disciplined enough to bring it off, although I thought I was.

Short term trading seems de rigueur these days, but I've made most of my money when I held things for a long time. And I was more successful when I was less intelligent about what was going on.

So what'll I do now, my brown-eyed self?

I've got three stocks (GOOG, AEO and TEX). I'm going to try to stop worrying about their rips and dips. A little benign neglect is in order, if I can muster it.

I'm going to re-establish a position of mutual funds. But I'm moving away from index funds and toward actively managed value funds.

I'm going to remain cautious, keeping 35-50% in cash, but be ready to add to my existing positions as conditions improve.

And I'm going to keep my day job as long as I can.


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