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CTSSHAH
@ctsshah
#TheIntelligentInvestor #BookReport For the after market and the weekend scroller - I leave you w/ this post. I've been trapped at home and a little hyperactive the past two days w/ too much time. Will definitely be toned down more next week. So on to chapter 2 ... "The Investor and Inflation." For some context, the Fourth Revised Edition I am reading was updated by Graham in 1971-1972 and initially published in 1973. Honestly strange, because it seems as relevant today as it probably was back then - do enjoy the chapter commentary added to bring it back up to speed now. I did a video on inflation a while back so I'll just leave the explanation to the video here - https://www.youtube.com/watch?v=DDfdkFkpVjM (best on mute, in hindsight the sound makes my teeth grind now) - or you can search #Inflation on Public and see whats out there. This chapter was discussing how purchasing power of a dollar goes down w/ inflation and trying to discuss a particular strategy that might combat inflation whether it be all stocks, all bonds, or a mixture of both. There was also the brief mention how physical gold doesn't have income return on capital and storage fee ... and an admission that maybe out of their element on real estate and non traditional investments (diamonds, arts, stamps, coins ... probably safe to now add Pokemon/Sports Cards and Crypto) as hedges against inflation. "Besides that, if the investor concentrates his portfolio on common stocks he is very likely to be led astray either by exhilarating advances or by distressing declines. This is particularly true if his reasoning is geared closely to expectations of further inflation. For then, if another bull market comes along, he will take the big rise not as a danger signal of an inevitable fall, not as a chance to cash in on his handsome profits, but rather as a vindication of the inflation hypothesis and as a reason to keep on buying common stocks no matter how high the market level nor how low the dividend return. That way lies sorrow." (Rev Edition - P55). My wife has commented on more than one occassion that I am a pessimist ... I usually counter w/ realist, but this book seems to have some parallels with the bull runs and hot stock market we have seen the last few years. The premise is simple - don't put all your funds in one basket and hedge against the unexpected. It spooked me enough to start selling off small positions to lock in gains and then use it to buy into bonds. I'm only 33 and have a long investing horizon ahead of me ... I had been essentially 100% stock/ETFs (minus any bonds in my target date funds in my 401(k)), but sometimes being cautious is prudent. So what if a small percentage maybe underperforms "the market," this is my version of an insurance policy - there are other strategies like shorting but I am unfamiliar w/ this style of investing. Oh and I'm dabbling in #Gold and #REIT as other hedges. Apparently there is also #TIPS or Treasury Inflation-Protected Securities ... will probably do a dive into this and make a video at a later date. Would be curious to hear your take on what you have done and plan to do below ... 👇 P.S.: I really can't thank you all enough for the love and support you all have shown me on here. I finally hit 100 and added a profile/banner pic so I could change it to a custom URL /c/CTSSHAH 🥳 Celebrating the little wins in life! #FunFacts #BookClub #TheMoreYouKnow #FeedYourBrain #DefensiveInvestor
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