Buffet wisdom
The market adores Warren Buffet and many of his observations about investing have become almost gospel for Wall Street. But today I heard a new one that I had not heard before. I think it may become my new favorite. Josh Brown paraphrased it on the Halftime Report, so I checked and the quote is, "The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd." (Aug 30,2019) Could not agree more, especially when I find myself having to reassure people not to panic and sell in a downturn. Part of what make Warren Buffet such a great investor is that he has seen it all, and market gyrations just don’t rattle him. He has his views, changes them as situations change and generally is just a steady force for good. He would be the first person to advise you to have a list of what you want to own, at what price you want to pay and just stick to your guns. Do not sell into a sudden downturn, but perhaps look to buy.
This week has been a perfect example of that. On Monday, panic was in the air and the selling was significant. “The long awaiting downturn is here! Batten down the hatches!” Tuesday the drop spluttered: Up, but then down and the day ended flat, confusing everyone. All day Tuesday there were both bulls and bears on the airwaves, but both sides were qualifying their predictions. Wednesday, the downturn became a rally, and buyers returned. Then today, Thursday, the rally really told hold, it looks like the week may end up ahead.
If you bought a little on Monday, stocks you like that were on sale, congratulations. You are probably looking at a gain. If you did not panic and sell, congratulations, you are not paying the tax man and having to get back in at higher prices. Your temperament matters. Steady as you go, that’s the way to make money in the market. Be calmly opportunistic when gifts like Monday’s decline are handed to you. Stick to your buying thesis. Find your market Zen.
Market Today: It was a rally day. Not back to where I started on Monday but close. Very few option trades as market was up so selling puts would not give me much premium (plus the VIX is back down) I was able to close three good puts on Salesforce (CRM), Applied Materials (AMAT) and PayPal (PYPL), sold and then bought to close calls on ROKU (ROKU) twice. Only sold two calls, on Abbvie (ABBV) and BioNtech (BNTX) as we are still not at market highs and sold two puts; Nvidia (NVDA) and LiveNation (LYV). Should be quiet tomorrow. 10.3