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Weekend brain food VIII


Weekend Brain Food

The Case for a Fun Portfolio


Here's the podcast at A Wealth of Common Sense.

I thought it's a brilliant idea to allocate a small portion of our portfolio to do the "fun stuff" (like what I am doing now for my Defi wallet). Doing so would satiate our desire to manage things and prove our skills, while preventing us from doing anything drastic to our base portfolio or messing up from overtrading.

At the beginning, some things can be mistakenly attributed to skill when it's just pure dumb luck. What we can do to find out is by making use of this fun portfolio to see whether it can outperform with consistency. 

The time frame can be months or even years. Of course, this fun portfolio is supposed to grow over time if it works out. If the effort input is disproportionately higher than your yield output, and your yield output is not significantly higher than your base (aka boring) portfolio, you know that the fun of it is probably not worth it.


My Single Biggest Fear In 2021


Here's the article at Seeking Alpha.

The author highlighted that we could be facing a lost decade in this peculiar macro environment. Inflation is historically high after a lot of money printing, stocks valuations sky-rocketed, profit margins may be on a multi-year downtrend and interest rates are expected to hike.


"Below we highlight a few, starting from the most optimistic:
 
Warren Buffett has famously said that you should never bet against America. However, he also has admitted that interest rates are to stocks what gravity is to matter, meaning that even a small change in rates could cause stock valuations to crash. Coincidentally, Fed Chair Jerome Powell just recently signaled that two rate hikes may occur in the coming 1-2 years.
 
Ray Dalio is less optimistic. He fears that we could be facing a "lost decade" with zero returns over the coming 10 years. He states that corporate debt is excessively high even as profit margins are set to shrink due to a permanent deterioration in the US-China relationship that will push companies to bring back portions of their supply chains to the US.
 
Jeremy Grantham goes a step further, stating that the current bull market that started in 2009 is an "epic bubble" featuring exploding price increases, extreme overvaluation, and historically speculative investor behavior. He thinks that this event will be recorded as one of the great bubbles, right along with the dot-com bubble of 2000.

Finally, Michael Burry, who famously made his fortune predicting the housing crash, has recently issued a series of tweets warning us of a "mother of all crashes." He believes that the Main Street losses will approach the size of countries and that hyper-inflation may be coming."

So stay agile, folks!


Related: 


Global Market Cap (SPGI) up, up and away



Does it matter when we retire?


It's a post written by SMOL, read it here.

My thoughts:

When you can retire early upon reaching financial independence... Is success in life determined by the goal of early retirement?

Personally I define success in life by achieving financial independence and having day-to-day simple happiness. Therefore, I do not consider early retirement as a success in life. Retirement is probably a "milestone" for attaining the freedom to do what one likes without having to bow down to work duties and routine for one's financial needs.

However, chasing retirement to define your status of success, that would be same as "...that luxury watch you saw others having, you tell yourself when you arrived you also must have! Then like that lor... No feeling when you have it."

If one does not know how to find happiness in life, life would be just a series of trying to escape from unhappiness and ending up going from one state of unhappiness to another. 

If the FIRE acronym stands for "Freedom is really expensive" (borrowed from Kevin of Turtleinvestor). One ought to wonder what is one sacrificing in pursuit of freedom or RE? 


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Comments

  1. CreateWealth888803/07/2021, 20:27

    "The Case for a Fun Portfolio"

    How about just having a few fun counters at anytime switching them in and out when they don't seen fun anymore?

    ReplyDelete
    Replies
    1. Rainbow03/07/2021, 22:12

      Hi Uncle8888,

      How do you deem a counter as "fun" or use it to test out a "for-fun" strategy?

      Delete
  2. Singapore Man of Leisure04/07/2021, 11:10

    Rainbow girl,

    There's an alt coin call Rainbow Coin!?

    Now that will be my fun portfolio whenever I capitulate and join the tulip craze!

    LOL!

    ReplyDelete
    Replies
    1. Rainbow04/07/2021, 17:24

      Hi SMOL,

      Yes, there is https://coinmarketcap.com/currencies/rainbowcoin/ and it's worth a grand value of $0.

      I don't think it will serve its purpose well for your fun portfolio.
      Lol.

      Delete

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