Thoughts on the Recent Market Run

It’s been a pretty crazy week for US stocks. I made about $100,000 in paper gains for the week. Sitting here regretting I didn’t go in stronger last week.

But technically I was all in already. All my cash was used up, I just had a ton of margin left to use. Again, I was expecting markets to at least go up and down, rather than straight up.

Despite the gains, I’m not really in an euphoric mood. Have come to realise that I’m investing for the long term and these gains don’t really matter. Still expecting plenty of volatile days ahead. Troubles don’t end when someone new becomes president. The next guy is likely facing a divided government, a China that will seek to test him, stopping the pandemic, and an economic depression. Seems easy enough.

I’ve not been buying and selling much into the rally. Just waiting for the smoke to clear.

A couple of lessons I learnt. First one is that the conventional wisdom, at least when it comes to stocks, is complete nonsense. A contested election was what the experts were warning about as risk to the markets. Yet it is a contested election and the market has gone way up. And now they are rationalising it by saying a divided government is good for stocks etc. As far as I’m concerned, these investment experts can go ciak sai (a polite Hokkien expression).

2nd lesson is that to build wealth, you have to concentrate. If you want to preserve wealth, diversify. I currently have three positions that are nearly $500,000 in total. Members will know which these are. I still view myself to be in wealth-building mode, simply because it’s fun to make money. Far more fun than spending really.

I was also premature in thinking Trump would be the next president, and I’m hopeful that Biden is on track. It’s kind of pathetic that Trump is crying to the courts to come save him. But the tide is against him, and we can finally get rid of him soon.

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