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What Time Is It?

Sep. 03, 2020 10:22 PM ET7 Comments
Larry Hall profile picture
Larry Hall's Blog
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  • 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.

Analyst's Disclosure: I am/we are long INTC.

I am also long TSLA.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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