What Time Is It?

Summary

• Markets are frothy.
• Some investors are profit-taking or panicking.
• I see little reason to do either.

It's panic time, according to the market action. Individuals and institutions believe they are selling high. Or, having witnessed the first leg down of a presumed multi-day or multi-week correction, they want 'off the ride' before it cuh-rashes.

It is amazing how the market-timing bug comes back when there is a sharp single-day downturn. The Bears emerge from hibernating, growling and bluff-charging. The Robinhooders (is this a new species?) suddenly realise that sinking half your savings into a single stock or facing a potential margin call can turn the gut queasy. (A great book on 'gut health' is 'the clever guts diet'  by Dr. Michael Mosley, not directly investing-related but a revealing look at how diet and digestion affect our overall health.) Panic is in the air like the sharp scent of smoke during a California wildfire. 

But is it time to panic?

It is never time to panic. The sell-offs bring out the 'timing' gene, which is closely associated with the panic gene, or a manifestation of same. Timing, though, is bad for investors. Adam Galas ('Dividend Sensei') and others have shown how moving a large portion of your assets in and out of markets because of a suspected knowledge of what's coming next is a chronic and repeatable error.

I have been aware of the froth, the bubble, the soaring hyperbolic trajectory, the 'call-it-what-you-will.' Yet I actually subtracted a bit from my cash pile and opened positions in INTC and TSLA. The INTC move was influenced by a nice presentation by Buffett-style investor Sven Carlin. The TSLA move, while it will appear to observers as a FOMO move, comes after months of evaluating the company and its stock and deciding that it's worth a long-term position. So 4-plus % of my portfolio is now in TSLA, though my timing on the purchase could have been better. But I wrote '4' and not '8' and not '20.'

The markets, and the humans, are somewhat interesting and somewhat predictable. The Bears are stalking, the Timers are timing, and anyone with a long-term perspective is taking a deep breath and not making a single move based on an expectation of markets either cratering or pausing before another run to the upside. 

Panic is always a poor idea.