dfloydr

Surviving Financial Hurricanes 2.0

I have followed the principals at Runnymede since about 1973.

In the summer of 1987, they headed for cash and when the 1987 market collapsed that Fall they were in a great position to buy.

Later I became trustee of accounts under their management. One day about four months before the dot com bubble burst, I got a call while having lunch: would I mind if they liquidated the stockholdings in the accounts. I gave them the green light, and once again they rode out the storm in cash.

Most recently, duplicate sales confirms started showing up in my mail box starting in November 2007 and that turned into a steady stream of sales over the next three months. Today the accounts are mostly in T-Bills.

Sure these sales sometimes incurred capital gains taxes, but avoiding market down turns has more than made up for any taxes paid. And if you do not loose in bad times, you do not have to do anything very spectacular between the hurricanes to do very well overall.


On Mar 06 08:43 AM Dave Shafer wrote:

> So an article was written? What did you actually do for your clients?
> Or is this more hind-sight bias? Did you selectively pick stocks
> to shed before they crashed or did you call for you clients to get
> out of stocks all together? If one were to have some formula for
> getting in and out of the stock market or going long and short then
> publish it and lets see how accurate it is back-tested. If not,
> then it was just luck [assuming you did get your clients out of stocks].
> I think the issue is more about matching mutual funds with buy and
> hold strategies and asset management strategies all the time forgetting
> to tell folks about systemic risk! If your clients could not withstand
> drawdowns of 50% then what were they doing in stocks? Finally, if
> you can outperform such luminaries as Buffett and Soros, or trend
> followers like Dunn, etc. over any reasonable time frame then you
> should make public that performance, it will make you a very rich
> man!
>
> Otherwise it is just rhetoric!
>
> If you are not judgeing based on performance, but on safety, then
> that is a different ballgame and you should admit to it. CDs over
> the last 10 years have outperformed the S & P and they are very
> safe backed by the FDIC insurance as long as you keep them under
> the limits!