Filter THIS! Cash is a position, too.
Today”s filter is… Cash is a position, too.
A friend used to tell me (and probably everyone he came into contact with that day) whenever he received yet another cold-call from a broker. “I”m already 100% invested… in cash!” On a side note, he never understood why that never led immediately to a hang-up.
There is always room in a portfolio for cash. The goal should not be to become fully invested.
Some argue for maintaining a balance because it cushions the overall fluctuation. I find that silly for a speculative approach, which should be the most accepting of fluctuation. Another suggestion is to keep cash available in case of a sudden mis-pricing, like a stock”s bad reaction to only a rumor. That seems like a circular argument — when the fish are running, we might even borrow to get as many hooks in the water as possible.
Only a few fish have been running lately. More and more every day, especially as some recent basing patterns start attracting buyers. But that has to be proved, and buying too early can be riskier than paying a little more for proof. There is no rush at this time to be fully invested. A single position”s size never should be based on the current availability of attractive candidates. The portfolio”s success shouldn”t rise and fall on the performance of a single position.
So many rules. Who knew that buying marijuana stocks could be so difficult? You”d think it should be more laid back than any other sector. But we”re not investing — we”re trading. And the only difficulty of the rules is that they make us impose self-restraint. But it”s really not that difficult to want to limit our exposure, especially not after seeing our portfolio value shrink because we didn”t follow (or know about) the rules.
Now, that”s difficult.
| Filter THIS! …is a pre-open missive that tells you one thing, the most important thing, if you had to filter your view of today”s marijuana stocks price action through just one thing — okay, sometimes two — what would that one thing be? |