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rj1
10-18-07, 02:08 PM
I bit the bullet, took out some of my savings that was gaining an awesome 0.45% interest per year, and bought some gold. I'm just looking to hedge my savings so that the value of my savings (both bank account and the gold I bought) can stay high together if the value of the dollar continues to fall. So I did this entirely as an investment. Very nervous doing it, but I think I did a good thing investment-wise.

GRG55
10-19-07, 01:38 AM
I bit the bullet, took out some of my savings that was gaining an awesome 0.45% interest per year, and bought some gold. I'm just looking to hedge my savings so that the value of my savings (both bank account and the gold I bought) can stay high together if the value of the dollar continues to fall. So I did this entirely as an investment. Very nervous doing it, but I think I did a good thing investment-wise.

In general I've found that the investments that were the easiest and most comfortable to make were exactly wrong. A little nervousness is not necessarily a bad thing in this game...

WDCRob
10-19-07, 09:51 AM
Does it follow that the ones that terrify you are more likely sound?

jk
10-19-07, 04:39 PM
In general I've found that the investments that were the easiest and most comfortable to make were exactly wrong. A little nervousness is not necessarily a bad thing in this game...
i never feel exactly right about any investment decision. there's always some anxiety. however, i feel pretty much the same anxiety when i decide to leave my portfolio as is.:rolleyes:

GRG55
10-20-07, 02:57 AM
Does it follow that the ones that terrify you are more likely sound?

Most investors lose money, even in a bull market.
Most investors tend to buy what has already gone up, because that is most comfortable. It's more comfortable because that is what the majority are doing, and that is what Wall St tells them to do (Notice how often analysts put on buy ratings after the stock has already run, and sell ratings after it has already cratered?).

One of my investing beliefs is that truly anomalous mispricing in markets is always behaviour related; the behaviour of crowds and herding and the psychology of large groups. According to Legg Mason's Bill Miller, investors feel a loss twice as acutely as they feel a gain. Investor/market crowd behaviours are fairly consistent and predictable over time.

I'll bet most people reading this don't find any new information in what I wrote above - and, frankly, anyone who's been reading the stuff on iTulip for any length of time shouldn't find anything new.

But still, most people are deeply uncomfortable straying too far from the accepted behaviour norms of the people around them. Such as early 2000..."Everyone" is buying tech stocks, maybe "we should buy some too", same for housing in 04/05. How many people felt pressured to jump into the final run to the top simply because their friends, family and neighbours patiently explained to them how stupid they were not to?

Experience has taught me that the "easy" decisions, for me, are invariably the wrong ones, and a certain degree of discomfort adds to my conviction.

The only reason I could see one should be "terrified" is if one has no conviction about the investment just made. That's usually a money losing move. Lack of conviction means you'll invariably get shaken out of your position, likely at a loss, at the first little indication you may be "wrong". One observation I have about EJ's writings is that he may in time be proven wrong about some things, but everything he writes has a clear tone of absolute conviction at the time he publishes it.

"You are right because your facts and reasoning are right, not because someone agrees with you" --Warren Buffett--