{"id":45341,"date":"2018-12-31T10:35:24","date_gmt":"2018-12-31T15:35:24","guid":{"rendered":"http:\/\/www.technologyinvestor.com\/?p=45341"},"modified":"2018-12-31T10:35:24","modified_gmt":"2018-12-31T15:35:24","slug":"how-investment-geniuses-perform-the-years-big-lesson-dealing-with-temporary-insanities","status":"publish","type":"post","link":"https:\/\/www.technologyinvestor.com\/?p=45341","title":{"rendered":"How investment geniuses perform. The year’s BIG Lesson: Dealing with temporary insanities"},"content":{"rendered":"

I will close 2018 up 1%.<\/p>\n

That’s awful for an investment “genius” like me.<\/p>\n

I’m not unhappy. Here’s why:<\/p>\n

I have a peculiar (i.e. strange) way of measuring my “net worth.”<\/p>\n

I do it after I’ve paid the family’s living expenses.<\/p>\n

No investment book does it this way. For me, it’s the only logical way.<\/p>\n

My father once said a rich man is one who can afford the standard of living he wants to live.<\/p>\n

Hence, if you come out ahead after paying all those living expenses — travel, tennis, snow plowing, movies, dinners — you’re rich.<\/p>\n

In 2018, I was rich.<\/p>\n

I also was stupid. Big-time stupid. In the late Summer\/early Fall, I was “rich” beyond my wildest dreams. Every stock i owned — from Square to Netflix, from Amazon to Google, from United Health\u00a0 to Apple — was reaching new highs. Serious new highs.<\/p>\n

It was a bull market. I thought I was a genius.<\/p>\n

I racked my brain — when will this end and why?<\/p>\n

I couldn’t find sound reasons — the economy was doing well, unemployment and interest rates were historically low, etc.<\/p>\n

But it did end. And it ended because all bubbles end. No one ever knows why.<\/p>\n

When I left Australia in 1966 to come here, my boss said “You’ll love the Americans. You’ll fit right in. Just like you, they substitute enthusiasm for intelligence.”<\/p>\n

That was a compliment. Nike has “Just Do It.”<\/p>\n

In America, everything moves in cycles of enthusiasm. Sometimes we call them technology breakthroughs. Sometimes we call them bubbles.<\/p>\n

This is how investing works.<\/p>\n

There are keys:<\/p>\n

+ Recognize it’s a beginning bubble. Get in early.<\/p>\n

+ Get out before it hits peak.<\/p>\n

+ Get out when it starts turning.<\/p>\n

+ Get out quickly.<\/p>\n

+ Get out.<\/p>\n

Here are recent bubbles you could have made a killing on:<\/p>\n

+ Bitcoin
\n+ FANG
\n+ Marijuana\/cannabis
\n+ Uranium
\n+ Sub-prime mortgages
\n+ Gold, silver, platinum, palladium, copper, etc.<\/p>\n

Get in when the buzz starts. Get out when your taxidriver\/barber\/nosy neighbor\/great unwashed acquaintances starts asking “Should I buy some bitcoin?”<\/p>\n

Bitcoin’s chart is classic bubble.<\/p>\n

\"\"<\/a><\/p>\n

We need to factor temporary madness into our investment decisions.<\/p>\n

It’s more lucrative than “value.”<\/p>\n

I’ll write more about this in coming days.<\/p>\n

Meantime,<\/p>\n

Some things learned over the holidays<\/strong><\/span><\/p>\n

+ Send food to sick relatives via Uber Eats.<\/p>\n

+ Every appliance — from fridges to washing machines, from boilers to cable modems — need to be protected with surge arrestors.<\/p>\n

+ You can take selfies of your family with your iPhone and your Apple Watch. Use the camera app.<\/p>\n

+ Sketchers makes the world’s ugliest, but most comfortable shoes.<\/p>\n

+ Microsoft has the worst customer service. Don’t buy their software unless you absolutely must.<\/p>\n

+ Lenovo makes the world’s most rugged laptops, sporting the best keyboards.<\/p>\n

+ YouTube has a video on how to fix anything and everything.<\/p>\n

The best Christmas Presents<\/strong><\/span><\/p>\n

First, the absolute best.
\n\"\"<\/a><\/p>\n

Best little photo printer: The $99 Canon Selphy CP1300.<\/p>\n

\"\"<\/a><\/p>\n

The family left our Christmas stay with us with a gorgeous 6″ x 4″ group shot. Nice gesture. Claire’s brilliant idea.<\/p>\n

More great presents tomorrow.<\/p>\n

Favorite cartoons<\/strong><\/span><\/p>\n

\"\"<\/a><\/p>\n

\"\"<\/a><\/p>\n

Thoughts of moment<\/strong><\/span><\/p>\n

+ Do twins ever realize that one of them is unplanned?<\/p>\n

+ Maybe oxygen is slowly killing us? It\u00a0 just takes 75-100 years to fully work.<\/p>\n

+ Intentionally losing a game of rock, paper, and scissors is just as hard as trying to win.<\/p>\n

\"HarryNewton\"<\/a>
\nHarry Newton, who played at 6:20 this morning. I’m running faster. Which is good. Tennis is a running game.<\/p>\n