esrosedotblog

THEATER OF THE ABSURD

When you sign up to own a stock portfolio, they ask you about your risk tolerance.

I put down "medium" in these later years.

It used to be "high".

I was, after all, an entrepreneur. I started two businesses. One folded into the other one, sort of, but was really a failure.

I have taken a lot of life risks from time to time. Some wise. Some foolish. Some merely for the adrenaline rush.

But, when it comes to the stock market, I have very little tolerance for the absurdities that sometime run it.

Take this headline this morning on CNN Finance (not a bad web site, actually).

Stocks set for opening drop

NEW YORK (CNNMoney.com) -- U.S. stocks were poised for a lower start Tuesday as investors expressed uncertainty about the outlook for markets on the anniversary of the bear-market low.

You got to be fucking kidding me. Doubt? Because of an anniversary? In the middle of a moderate bear market recovery?

A great week last week.

But this is what drives a lot of the market swings.

Like it or not.

A lot of people run in and out of the market (costing themselves a lot of cash in fees as well as peace of mind) on just this kind of thing.

I have to damp the curves out for myself.

Yeh. I admit it. I look at the market every day. Three or four times a day.

But I only really look at the results on my income by the week.

My investment lady says that a month would be better.

I may have medium or higher risk tolerance but I am not a fool.

I have never pulled out of the market though.

And that doesn't mean that my risk tolerance has not been tested. It is one thing to fill out a form and another to see your savings evaporate to the tune of 30-40 percent. Which they did. And now are half recovered.

I have a friend who though he had risk tolerance and he didn't. He couldn't stand it and cashed out. Now he can't get back in.

I have this idea the what goes down must go up. This applies to a lot of things. Not just markets.

I know the reverse of this is true as well. But, on the up, you have to know when to pull back. I never have. Even when I knew it would not hold.

I have made mild adjustments.

I told the managers (it is a managed account) to split out and put a bunch of cash in the internationals a few years ago. I don't think it mattered.

They do pretty well by me no matter what.

I pay a management fee. No commission.

The "automatic" buys and sells that they make on my account are dizzying.

I do not look at that. I cannot comprehend it.

Now show me a small management training company that you want to start up and want to make a going concern worldwide. I am up for that.

Funny. Just a moment ago, the market was not down at all. It was in the green. Up. Headlines notwithstanding.

Labels: market