Skip to main
#TheIntelligentInvestor #BookReport Onwards to chapter 3, it was a rainy morning and had plenty of time to read and so I struggled through "A Century of Stock-Market History: The Level of Stock Prices in Early 1972." I'm far from a history buff or technical investor and so this one was particularly painful to read and digest. With that being said there is wisdom in understanding where the market has been before truly appreciating where the market is potentially going. Also, sorry this will be a long one and it incorporates some of my old content ... my goal is to build posts that have a long shelf life and can still be helpful long after I'm gone 👻 ... good thing it is the weekend. "Few people seem to have been bothered by the tought that the very extent of the risk might indicate that it had been overdone. The subsequent decline from the 1968 high to the 1970 low was 36% for the Standard & Poor's composite (and 37% for the DJIA), the largest since the 44% sufferred in 1939-1942, which had reflected the perils and uncertainties after Pearl Harbor. In the dramatic manner so characteristic of Wall Street, the low level of May 1970 was followed by a massive and speedy recovery of both averages, and the establishment of a new all-time high for the Standard & Poor's industrials in the early 1972." (The Intelligent Investor - Rev Ed p 69) When I read this, I thought about my own experience riding out the drop in Feb/March 2020 (see my post on #DollarCostAveraging had you bought $100 the first market day of each month in 2020) and the importance of #TimeInTheMarket (click on this and look for my #FunFacts post on it) or watch BuildingBread's new YouTube video on "When is the right time to invest?". In short, the aforementioned passage reminds me that trying to time the market could easily lead me to panic selling to realize losses and then also make things worse by missing out on a quick rebound or a subsequent bull market while on the sidelines. For me in 2020, I kept my retirement savings accounts essentially as is but sold off my individual brokerage account that was mostly S&P500 ETFs for tax loss harvesting purposes and then moved them into sector ETFs ( $IBB - eventually rotated out of this when it stalled, $FTEC - still have, $FDIS - still have) and $VT (still have) to avoid wash sale rule. This locked in the tax loss to reduce my taxable income but I never truly left the market since I basically just recategorized it (check out my channel for video on #TaxLossHarvesting if this is confusing). The chapter 3 commentary also provided a nice passage: "Even though investors all know they're supposed to buy low and sell high, in practice they often end up getting it backwards. Graham's warning in this chapter is simple: 'By the rule of opposites,' the more enthusiastic investors become about the stock market in the long run, the more certain they are to be proved wrong in the short run." (The Intelligent Investor - Rev Ed p 84) I still think this book manages to some how stay relevant as we have been on a crazy run since the low of 2020 and it has convinced me to start locking in profits and reducing my exposure from nearly all stocks to now incorporating some bonds. So for my Roth IRA I converted 10% to High Grade Bonds, 35% S&P500 mutual fund, 35% REIT, 10% Dividend Stock or ETFs, and 10% $FCOM - but likely to sell this and put half in bonds and half in cash). For my individual brokerage account I donated any of my long term investments w/ returns >50% to my #DonorAdvisedFund (video on YT or can search post on Public). #CharitableGiving is something that is important to me and I am going to do it anyways, so this allows me to lock in my profits w/o paying capital gains tax and then gives me the benefit of choosing how that money is spent by picking what non profit I want to give it to ... chances are they will probably be more efficient in spending my money than the alternative. The other cool thing about the DAF is that say I end up giving more than I wanted to give in a given year, I don't have give all that money away immediately, I can let it grow in the stock market w/in the DAF and slowly give it away in future years. So in essence, I could choose to super fund multiple years worth of charitable giving this year now while markets are hot, lock in profits now, and then if things drop in the future I can just slow down my charitable giving and spend down what I had already super funded this year and then use the cash that got freed up to buy more stocks at a discount - if that makes sense. P.S.: I'm so sorry it was so long ... I'm impressed you made it this far so thank you for reading. #CharitableGiving #TaxEfficiency #DefensiveInvestor #AmateurInvestor
Own your future.
Build your portfolio.

All of your investing.
All in one place.

Invest in stocks, ETFs, crypto, and alternative assets on Public. Transfer your account to Public and get up to $10,000.
Sign Up
Contact Us
Check the background of this firm on FINRA’s BrokerCheck.

© Copyright 2023 Public Holdings, Inc. All Rights Reserved.

Market data powered by Xignite.

Brokerage services for US-listed, registered securities are offered to self-directed customers by Open to the Public Investing, Inc. (“Open to the Public Investing”), a registered broker-dealer and member of FINRA & SIPC. Additional information about your broker can be found by clicking here. Open to Public Investing is a wholly-owned subsidiary of Public Holdings, Inc. (“Public Holdings”). This is not an offer, solicitation of an offer, or advice to buy or sell securities or open a brokerage account in any jurisdiction where Open to the Public Investing is not registered. Securities products offered by Open to the Public Investing are not FDIC insured. Apex Clearing Corporation, our clearing firm, has additional insurance coverage in excess of the regular SIPC limits. Additional information can be found here

Brokerage services for alternative assets available on Public are offered by Dalmore Group, LLC (“Dalmore”), member of FINRA & SIPC. “Alternative assets,” as the term is used at Public, are equity securities that have been issued pursuant to Regulation A of the Securities Act of 1933 (as amended) (“Regulation A”). This content is not investment advice. These investments are speculative, involve substantial risks (including illiquidity and loss of principal), and are not FDIC or SIPC insured. Alternative Assets purchased on the Public platform are not held in an Open to the Public Investing brokerage account and are self-custodied by the purchaser. The issuers of these securities may be an affiliate of Public, and Public (or an affiliate) may earn fees when you purchase or sell Alternative Assets. For more information on risks and conflicts of interest, see these disclosures. An affiliate of Public may be “testing the waters” and considering making an offering of securities under Tier 2 of Regulation A. No money or other consideration is being solicited and, if sent in response, will not be accepted. No offer to buy securities can be accepted, and no part of the purchase price can be received, until an offering statement filed with the SEC has been qualified by the SEC. Any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of acceptance given after the date of qualification by the SEC or as stated in the offering materials relating to an investment opportunity, as applicable. An indication of interest to purchase securities involves no obligation or commitment of any kind.

Cryptocurrency execution and custody services are provided by Apex Crypto LLC (NMLS ID 1828849) through a software licensing agreement between Apex Crypto LLC and Public Crypto LLC. Apex Crypto is not a registered broker-dealer or a member of SIPC or FINRA. Cryptocurrencies are not securities and are not FDIC or SIPC insured. Apex Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Please ensure that you fully understand the risks involved before trading: Legal Disclosures, Apex Crypto.

Dalmore and Apex Crypto, LLC are not affiliated with any of the Public Holdings subsidiaries. Commission-free trading of stocks and ETFs refers to $0 commissions for Open to the Public Investing self-directed individual cash brokerage accounts that trade the U.S.-listed, registered securities electronically during the Regular Trading Hours. Keep in mind that other fees such as regulatory fees, Premium subscription fees, commissions on trades during extended trading hours, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Open to the Public Investing’s Fee Schedule to learn more.

Fractional shares are illiquid outside of Public and not transferable. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see our Fractional Share Disclosure to learn more.

All investments involve the risk of loss and the past performance of a security or a financial product does not guarantee future results or returns.