When in doubt, save cash
I was planning to write a full post on this topic, but then I found a quote that sums it up perfectly, so I’ll lead with that:
“It takes character to sit with cash and to do nothing. I didn’t get to where I am by going after mediocre opportunities.” — Charlie Munger
Holding cash isn’t irrational. And it’s not timing the market.
The irrational part comes in when you constantly increase your cash position which leaves time on the table for your money to grow *in the market.*
As of today, there are:
• two major global wars (Iran, Ukraine),
• a weak U.S. economy,
• weak private credit markets
• global geopolitical tensions and economic uncertainty, and
• a bubble-like AI revolution
It’s increasingly hard to predict what may come next, and while I’m in no way panic-selling any of my positions, I don’t believe it’s a bad idea for me to save cash.
I’m doubtful for a lot of things, and amid any uncertainty, I save cash. The end goal is to make sure my money is invested in shares of what I deem quality companies. (After all, Money invested > Money sitting idle.)
But those types of opportunities aren’t popping up consistently in this market, and that’s to be expected.
Patience is a virtue. No need to always buy new shares of new companies, or current holdings, just because.
At least as a stock picker.
Regardless, that’s my tiny opinion as we start the week.
Happy investing, folks. Stay rational (always).
