stock market was up today...

#13,526
#13,526
Thunder Good-Oil said:
What struck me as odd is that Charlie Munger suggested the opposite. He said that you really only need to be invested in about 4 places. Then he cited Berkshire-Hathaway, China, and rental properties as his choices. There might have been a 4th that escapes me. Of course, BRK covers many businesses. It’s a bit like a broad based index fund. And his real estate holdings can be well dispersed since he has about $2 billion.

Buffett likes farm land. And at the core he prefers assets that create things and produce income over time.

But going back to Munger, unless you are able to set aside several million in very safe assets that could keep up with inflation, I believe that diversification is extremely important. Returns can be enhanced by being concentrated in only a few owned assets, but the selected assets sure better be good ones with little room for error by picking a bad one(s). However, if you only own one thing, Berkshire-Hathaway should probably be that security. It is at such a large size though that great returns are more and more difficult to find. SPY or VTI might be just as effective.
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I found what Charlie said about diversification. His 4 investments (actually 5 with his “small” interest in the Daily Journal) are (1) Berkshire-Hathaway, (2) CostCo, (3) apartment buildings, and (4) China “through Li Lu” (Li Lu’s fund).

Charlie Munger: you don’t need all this damn diversification - and - you’re lucky if you’ve got 4 good assets.

He also only has four stocks owned by the Daily Journal whose portfolio he manages. BAC, WFC, BABA, and USB. He admits that BABA was a mistake.

 
#13,529
#13,529
marcusluvsvols said:
I am absorbing and trying to learn from all thats posted here. Thanks.

Question: with the depleted stockpiles now of weapons in NATO countries, and the new coldwar with China and the increased pacific demand, do yall not think putting maybe 10% in the best companies making up the Military Industrial Complex would be a good investment for the next 5 years or maybe 10?
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Sure. Check out FSDAX - Fidelity’s active offering that tracks Aero & Defense

FSDAX – Fidelity® Select Defense & Aero Port Fund Stock Price | Morningstar
 
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#13,531
#13,531
Anyone can have a blue checkmark now for like 10 bucks a month.

This guy is a clown . Not even in the US...a crypto pusher who has lost his butt like most crypto investors have over the last couple years. He is trying to induce a panic.

Is this fragile house of cards known as fractional reserve lending/fiat currency extremely vulnerable and destined to crash eventually??? Yes. Without a doubt. Never should have left the gold standard. But this clown has no idea what the US markets are gonna do next week, month, or year.

Plus he pushed the jab and boosters with much fervor...so his opinion isnt worth wiping my ass on regardless tbh.
 
#13,537
#13,537
85SugarVol said:
Can’t just bail out SVB
Can’t simply allow contagion

What do you do?

20-30% haircut for everyone with .gov covering the rest? I don’t know what you do here.
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There is plenty of info available on SVB showing they were being reckless. Deposits nearly doubled in a year, they used them to buy longer term treasuries with data showing inflation was looming and thus fed rate hikes were looming. And that caused a self imposed liquidity crunch. I read somewhere that 90% of SVB’s deposits were not FDIC insured as they are big chunks of money deposited by high risk startups. I mean it’s like they wrote a playbook on the fly to demonstrate exactly how to not manage risk in this current inflationary environment
 
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#13,538
#13,538
headhunter15 said:


How true is this?
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There are a couple of banks so far (SVB and one other in California) with a solvency problem. Most banks should be well capitalized as laid out by Dodd-Frank. I think that tweet is overblown. That’s not to say this couldn’t set off a further sell off in the markets and make for several rough weeks or months in financial markets.
 
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#13,540
#13,540
Vol737 said:
There are a couple of banks so far (SVB and one other in California) with a solvency problem. Most banks should be well capitalized as laid out by Dodd-Frank. I think that tweet is overblown. That’s not to say this couldn’t set off a further sell off in the markets and make for several rough weeks or months in financial markets.
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That tweet is way overblown and designed to get clicks. SVC had a particular flaw in the way it did business, which was that it bought long term treasures at locked in low rates. As people with deposits realized they could be earning a lot more elsewhere and started to withdraw last week, it became apparent that SVC had too much money locked up in the treasuries.

The money is still there. It's just in suspense until the Treasury and others let them off the hook on getting out of those long term, low interest bonds.

Everyone realizes the cascading effect of this. They'll have a solution sooner than later to fix it and make everyone whole.
 
#13,541
#13,541
lawgator1 said:
That tweet is way overblown and designed to get clicks. SVC had a particular flaw in the way it did business, which was that it bought long term treasures at locked in low rates. As people with deposits realized they could be earning a lot more elsewhere and started to withdraw last week, it became apparent that SVC had too much money locked up in the treasuries.

The money is still there. It's just in suspense until the Treasury and others let them off the hook on getting out of those long term, low interest bonds.

Everyone realizes the cascading effect of this. They'll have a solution sooner than later to fix it and make everyone whole.
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No the money is not “still there” at present valuations of those government bond investments. That is the whole problem. If SVB could have just sold their holdings at current market value to cover their liquidity needs then they would have. However had they done that they would have realized a huge loss that their balance sheet was apparently already indicating in flashing red lights and alarms. That is why they tried to sneak that capital raising effort in on Wednesday. SVB blatantly failed at risk management. That’s it.
 
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#13,542
#13,542
lawgator1 said:
That tweet is way overblown and designed to get clicks. SVC had a particular flaw in the way it did business, which was that it bought long term treasures at locked in low rates. As people with deposits realized they could be earning a lot more elsewhere and started to withdraw last week, it became apparent that SVC had too much money locked up in the treasuries.

The money is still there. It's just in suspense until the Treasury and others let them off the hook on getting out of those long term, low interest bonds.

Everyone realizes the cascading effect of this. They'll have a solution sooner than later to fix it and make everyone whole.
Click to expand...

lol
 
#13,543
#13,543
NorthDallas40 said:
No the money is not “still there” at present valuations of those government bond investments. That is the whole problem. If SVB could have just sold their holdings at current market value to cover their liquidity needs then they would have. However had they done that they would have realized a huge loss that their balance sheet was apparently already indicating in flashing red lights and alarms. That is why they tried to sneak that capital raising effort in on Wednesday. SVB blatantly failed at risk management. That’s it.
Click to expand...


In your last two sentences we agree.
 
#13,544
#13,544
lawgator1 said:
In your last two sentences we agree.
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You can’t just agree on the last two sentences and claim that the money is “still there”. The treasury bonds are worth what they are worth on that days valuation. Knowing they had long term exposure showing a large loss they should have spent the last year conserving liquidity.

There isn’t going to be a fed bailout apparently. The Feds appear to be trying to broker a sale… likely to a larger bank that understands how treasury bonds work and with the capital reserves to absorb SVB. And that’s exactly how it should work.
 
#13,550
#13,550
volfanhill said:
All FDIC member banks pay the FDIC a premium. That premium is based on the amount of deposits the bank holds. The FDIC uses those payments to pay out when a bank fails.
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I’ll add up to a limit of $250k per depositor per bank. It had been covered before but just for completeness.

This is why if you somehow manage to have more than $250k on hand in cash or CDs you split that between banks.
 
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