While the Investometer chart shows large changes in both accounts this month the reality is I increased cash by 9% this month. As I commented the other day I’ve been selling down fairly to overvalued US stocks, notably FDX and II-VI, and buying undervalued Australian shares.

The growing account with regular cash flow is the SMSF I manage. Due to regular personal and employer contributions, the coming capital return from Biota and other dividends I’m happy maintaining a lower cash balance in the SMSF. If the market goes down I’ll have …

There’s a chance that I’m being revisionist, but I think Inch Worm that started me on my investing path. When I discovered that if I kept doubling I soon got to 1000 (1024 to be exact) and as that was one thousand, I therefore knew the entire doubling number series for all the numbers I knew, 500 trillion in 49 doubles.

The most important double to me was always the last one. That final iteration doubled all my previous doubles, no matter how long I had been doubling. Starting at 1 it takes nine doubles to get to 512, while the next iteration by itself would add 512 more. That always seemed phenomenal to me and it was that final double that I learnt to focus on and not the first double from 1 to 2.

Four trades this month, all in the US and all calls. One was called, Fedex delivered the cash on the Buffett / BNI inspired surge in transports. I’m glad to have the cash and FDX gone. FDX closed at $81.78, $0.28 above my sold total ($75+6.50).
AEO, MIDD and NUAN averaged a 4.6% cash gain for the six weeks and ended lower. If you’re both happy to hold and to sell a stock then calls are excellent dividend producing options. However, if you want to sell a company then sell it, …

Invested levels didn’t change this month, but four calls sold raised cash near the short term peak.
The FI Fund briefly returned to positive territory during October. It was good to pop into the green and lets hope we see more of that soon.

This morning I thought I’d check up on my version of reality. We all suffer from rosy retrospective from time to time, you know when you think the past was better than it was. If only my Latin teachers had taught useful phrases like “memoria praeteritorum bonorum” (the past is always recalled to be good), instead of all those damn conjugations I might have learnt something useful.
I went back through my account statements for the last year to check our percent invested each month. I’d previously checked some months and thought …

Simple Path to Wealth & Investing vs Working

It is essential to understand and more importantly appreciate the power of compounding to fully grasp the cost of something, whether it’s a service or software or a one off-cost. Christina from SMSF Investment Strategies left a comment on my Preparing your own Self Managed Super Fund (SMSF) Tax post that she thought you had to use software like BGL’s Simple Fund to prepare your accounts and tax. That reminded me why I choose not to use BGL or any other paid software for my SMSF accounts. The short answer …

Sheesh! Is anyone starting to get motion sickness yet? The volatility on the Australian stock market is absurd. This is Mr Market on fricking steroids. I believe roid rage is the popular term these days.
It’s no wonder we’re experiencing such heightened volatility right now as a full scale war has broken out between fear and greed. I was going to say optimists and pessimists, but as I believe optimists and realists would be more accurate I decided to wimp out and go for the cliched fear and greed. Greed has jumped …

As promised the other day here is my updated Investometer. I introduced the investometer back in November and like many things due to the frenetic pace of the market I have not maintained it as originally promised. We have continued to raise cash and reduce the number of positions we own, aprticularly in the US. As I’ve commented before I was sucked into the path of diversification a few years ago and have been slowly extricating myself ever since. I am determined to return to my concentrated ways, which for me means 20 or less equity positions. My favourite quote on diversification remains, you concentrate to accumualte wealth and diversify to perserve wealth.

Over at PazzoMundo I noticed the following comment, which is typical of numerous comments and posts I’ve been reading lately. “This market is exasperating – I’ve been expecting the rally to lose steam for a while now but it seems that it’s quite happy to ignore economic reality”.

In the Intelligent Investor Benjamin Graham said “In the short-run it’s a voting machine, but in the long-run it is a weighing machine.” For some reason most market participants focus on the second part of that statement, they concentrate on the weighing maching.