Monday, November 26, 2007

Ouch!

Nothing like the death of a thousand cuts to get the old blood flowing. Or as the Church Lady said, "Isn't that special?"
You think you got problems? My account stays someplace between 100% and 140% in stocks. I use some of the most volatile ETFs to add to the excitement.
I do this because I'm insane. Just kidding. I'm only as neurotic as the next investor, just not about investments. If you have, say 25-50% of your money in stocks, and the market's down 10%, pretty much like it is since the highs a few weeks ago, then you can imagine how much fun it is on this side of the blog.
I've disintegrated about 9.3% from my market value on 10/31 this year.
In less than a month. About the same as the Dow.
On the other hand, from 09/30 to 10/31, I was up 6.34%. (The Dow was up a fraction, basically unchanged.)
If you look from 09/30 to today, I'm down 2.9%. The Dow is down 8 or 9%. I didn't do all the decimals, that's not the point.
The point is, am I down 9.3%, or 2.9%, or what?
Are you getting the idea? I can pick all sorts of measuring periods and feel good, crappy or indifferent. Money managers pick measuring periods selectively as well. They never ever pick measuring periods that make them look incompetent. Bear that in mind when you read performance reports.
If I'm going to feel good or bad based on statement end dates, that's okay, as long as I know it's irrational.
Warren Buffet once said, "Why should investment performance be measured by the time it takes the earth to circle the sun?"
There is no reason, anymore than there's a good reason to measure it by the month, the day the hour or the second. You may as well decide to measure by every third Wednesday, or the phases of the moon. (Some goofball out there does, you know it's true. If we can think of it, somebody's doing it.)
No, I don't like watching my one month gains evaporate into a negative. I have brief moments of 'what if' when I think I could have sold out on October 31 and kept the gains. Of course, then I'd have to have a second brilliant insight and pick the day to get back in. I'm not that good. If you think you are, then by all means go for it. Throw some math at the problem, that's what made the hedge funds great.
I do have one question. My account got smashed big time in the last three or so weeks. I have to wait it out and lick my wounds. If I'd been in charge of imploding the stocks of Merrill Lynch, Citigroup or Bear Stearns, I'd have gotten millions to go away quietly.
So, where's my check?

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