If you buy now you are catching a falling knife. If you don’t buy in a down market you are missing your opportunity. If you sit on the sidelines your cash is depreciating. If you don’t put cash in your portfolio you are over exposed.
The markets are at it again. It is the end of the year and everyone is trying to talk everyone out of the market. There are analysts galore who believe that Armageddon is around the corner. Global meltdown is only a heart beat away and the Federal Reserve chairman has no understanding of the markets. There are bankers peddling new instruments that handle “convexity of the mortgage losses” and “calculus of the…” Whatever!
In the past six years that I have followed the markets, CNBC and other business media outlets seem to take investing as a contact sport rather than a calm and calculated activity. The last time I felt this way was when I was walking down the aisles of Caesar’s Palace in Las Vegas. Apparently, I am doomed if I do and damned if I don’t. And then there is the calm voice of reason. When asked what he thinks about the rate decision by the Fed Warren Buffet replied, “It doesn’t make any difference for a long term investor like me”.
It seems to me that he is the only one around here that does not suffer from delusional Schizophrenia. The sane voice of reason is always the easiest to comprehend. Like Russell Crowe (John Nash) says in “A Beautiful mind”, “She can’t be real because she is just not getting old”.
Just like Nash I too will pretend that I cannot see and hear the wild screams of a market gone wild.