,
7 tweets,
2 min read
Read on Twitter
Yesterday’s @jposhaughnessy thread on investment strategy made me think about my own strategy: 1) value investing at its core is buying a stock when it becomes cheap and selling it when it becomes dear; 2) I am not comfortable with valuing most stocks;
3) valuation depends on the the future of a business and the future is always uncertain; 4) even the idea of “margin of safety” is too theoretical imo: in a world that keeps changing very fast your margin of safety might evaporate even faster;
5) therefore I feel more comfortable identifying an instrument which I am almost sure will trend upward in the long run; 6) then I gradually buy it investing more when its price goes down and less when its price goes up; 7) I might even sell some if its price goes up too quickly;
8) I set a monthly target for the value of my investments that, if exceeded, makes me sell; 9) here is when index investing comes in: indexes like $QQQ, $VIOO, $IBB are instruments which I am almost sure will trend upward in the long run;
10) unfortunately I can say the same thing of no single stock; 11) I find buying and selling opportunistically much easier to do when you’re almost sure the instrument you have chosen will trend upward over the long run; 12) is it a get-rich-quick strategy? No;
13) will my wealth keep increasing at a satisfactory rate for many years to come? Yes; 14) how? The combination of an instrument that should do slightly better than the general market + opportunistically buying and selling it + infusions of fresh capital at the end of each month.
Now I only hope @jposhaughnessy doesn’t find this strategy too complex!😉
