I have title this … Until We Meet Again … Because I have decided to take some time off and away from the board and reopen a door I closed many years ago on my golf game. Oh sure, I’d play form time-to-time but I would just bang the ball around so to speak and played for just plain old fun not carrying if my ball strikes were really pure.
With this I have copied, pasted and expanded part of one of my more recent post since I feel the market is reaching a topping out phase unless there happens to come along a QE4. Just in golf there is more than one way to play the course and in investing there is certainly more than one way to play the market. But, I wanted to leave you with how I see it in today’s time.
Hello,
Not saying this concept should be followed … but, here is what I have been doing since the S&P 500 Index reached 1425.
Since my risk tolerance for equities ranges from 40% to 60% within my portfolio I start selling equities down when they are close to making new 52 week highs thus reducing and controlling my allocation to them. Conversely when they are towards 52 week lows I’ll start building my allocation to them while staying within my allocation range of 40% to 60% which was determined by a risk tolerance analysis. I am striving to move towards the low range when equities are at 52 week highs and to move towards the high range when equities are towards their 52 week low valuation. In short words, buy low ... sell high ... while being mindful of my allocation range to equities. In 2009 and 2010 I was more towards the 60% range and since then I have been in a control sell down mode along the way even though I have made some special buys from time to time when I felt good value could be had.
Since the S&P 500 reached 1425 … I have been selling about a sum equal to one percent of my equities at each 25 point step mark of 1450, 1475, 1500, 1525 & most recently at 1550.
A little math, each step ranges about 1.7% to 1.6% between them so this allows for some equity asset growth along the way. In short words equities have grown by about 8.8% form the 1425 step to the 1550 step … and, I have taken a sum equal to about 5% of this to my pocket while letting the other 3.8% ride. So equities have still grown while I have been in my sell down process and they currently account for about 46% of the portfolio (by Xray analysis).
I’d much rather book some of my profit in a market uptrend rather than trying to make it all in a market pullback when there is a lot of selling activity occurring by others. If I decide to sell in a market down draft it would be more for capital preservation move while being mindful to where my equities are bubbling within my allocation range just as I am doing during this bull market upward run.
If I have not right sized my portfolio's equity allocation by the time a good market down draft presents itself I'd be doing so pretty quickly in getting towards the low range of my equity allocation. At my age of 65 capital preservation is important as well as the prospects of growing the portfolio over time.
Not saying this is perfect … But, it is what I am currently doing and it draws from the lessons I have learned through the years from not only from my late father but Mr. Market as well.
So with this ... I wish all good investing and good fortune until we meet again. I am going to go silent for a while and just sit back and just watch the board. My golf league will soon start play; and, I need to spend some time in getting my golf game in shape.
One of my late childhood friends was a PGA tour caddy ... Harry Caudell. Now it is time to see if I can put to use some of the things that Harry brought to my game as well as the late Clayton Heafner who gave me my first golf lesson at the age of six. Clayton is one of my city's favorite sons who represented the USA many years ago with his winning Ryder Cup play. For those that would like to expand their golf history knowledge I have linked some information about Clayton below.
http://en.wikipedia.org/wiki/Clayton_HeafnerIt is interesting, my first scheduled match falls on Thursday April 11th, which is also my late mother's birthday and opening round at the Masters. I can assure you that my golf game is not the type that is found inside the ropes at the Masters although I wish it were. My golf league calls our opening event the Carolinas' Masters and, yes, we play for a green jacket too.
So, with me, it is now off to the practice tee that I go ... And we shall see ... “How good it can be to be on the tee again with my friend Harry C.” My aim is to stike the ball pure and if I can do that I'll be a contender within my league as Clayton taught me his secret to putting which is half the game itself.
“Good Investing” ... and, “Watch your Risk.”
Skeeter
Comments
My dad is anxious to golf also. We live in Illinois near where Mr. Snowball lives. Dad is 75 and probably in better physical shape than myself due to golfing 4-5 days a week. He can now use the tee that is closer to the pin and his golf buddies don't like it because he was allready beating them. Have fun this spring/ summer.
Art
Sorry to hear your renewed interest in the golf will limit your posting on MFO. Your posts have probably influenced my investing style more than anyone else. Hope you lower your score as you increase your savings.
Thank you for the good wishes.
While I still have good health and physical strength I feel this is something that I need and want to venture back too. I have a signed two dollar bill that I won in a golf match off a good friend in Atlanta Ga many years ago at a course named after the late Bobby Jones. Al and I play for it each year and it will be up for the winners taking again this year. I now hold it and he is not getting it back ... unless he wins it, of course.
I have a secret plan, and treat, in store for Al this year. His name is Leon Crump. He is from my old neighborhood and traveled the county with one of my high school class mates, Dickie Starnes, playing high stakes matches. Leon wrote a book about his ventures … It’s titled Drive for Show, Putt for Dough with a sub title of Memories of a Golf Hustler. A link to his book is below.
http://www.amazon.com/Drive-Show-Putt-Dough-Memoirs/dp/0062701711
I guess, I can now sign off with … and, I think you are now seeing how I earned and got the nick name ..."Skeeter." It will indeed be hard for Al to even get to one up on me ... and, if he should and I find myself two down ... I'll "press" his pants off of him. By the way, my driver is named "Harry C" and my putter is named "Clayton."
Good Golfing,
Skeeter
Enjoy your time-off.
We'll be here and we'll leave the porch light on for you.
David
Regards,
Ted
P.S. I still play with my 1977 PING irons, and later next month will start my summer job working in the pro shop at a nearby country club. Its not about the money, its the free golf. Every year its one more club as my handicap has gone from single digits to present day 12, but at 76 I get to play from the Senior Tees
I hear you on the Pings ... my irons are pat. pend model eye 2's that my late friend Harry C picked up for me off the tour years back. I have a number of putters, some came off the tour again from my buddy Harry C. But my real putter named Clayton came from Clayton himself. As the story goes Clayton won a high stakes match against some other pros and one of their cars, a 1959 Cadillac. He was cleaning the trunk of the car out and pulled a deep faced bulls eye putter from its trunk and said here kid, for you. It came with the car I won in a golf match. And, with that I got another golf lesson at my age of eleven with my first coming from him in 1954, my age six.
I'v got some more good stories ... but, I'll close with that one.
Skeeter
Take care! Regards, OJ
Please do stop by and say hi once/week
Some doors should never be opened, IMHO. I hope you have a change of heart.
Best
Congratulations on your decision to “go golfing”. Life is far too short to not do what gives you great joy and happiness.
But your chosen avocation is not an easy discipline; good golf is truly a tough nut to crack. Charles Ellis, in his “Winning the Loser’s Game” book, equates golf with tennis and investing as playing a Loser’s game. In tennis he references studies by TRW’s Simon Ramo and in golf he quotes professional Tommy Armour.
Armour said: “The best way to win is by making fewer bad shots”. Ramo concluded that “The amateur seldom beats his opponent, but he beats himself all the time”. Ellis has observed that successful investors are those who make fewer bad decisions; they typically don’t take high risk adventures, but prosper from boring, low risk investment choices.
My recollections of your postings place you somewhere in the middle ground. I remember you as an experienced and prudent gambler, both in the marketplace and at the dog tracks. The gambler title is not a pejorative label in the context that I use it. I respect your knowledge in the investment universe, your ability to analyze the information, and your wisdom in making asset allocation and specific mutual fund selections. They may not have always delivered perfect outcomes, but they were always thoughtful and demonstrated solid money management concepts.
Golf can be a painful game. I never mastered it. The most successful and unique golfer I ever knew was during my military days at a post in the US. He was the post’s top dental surgeon. He was an excellent surgeon, but he was an even superior golfer. He was the post champion whose style enraged his less accomplished opponents. The good doctor played his rounds with a depleted set of only five clubs. To further rub salt into the open wound, he caddied the clubs in his belt.
Many of the axioms that golfers often recite also apply to the investment world. One goes something like “No matter how bad you are playing, it is always possible to play worse”. Sad, but true.
Another golfing rule is that “The less skilled the player, the more likely he is to share his ideas about the golf swing”. That bit of wisdom also seems to reign supreme in the investment community. I’m sure you have heard a thousand of them, and remember them all. Have fun as you retool an old love.
I sincerely wish that both your investments continue to yield a double digit annual return and that your golf game progresses into the single digit handicap range. The best of luck towards achieving those worthy goals.
To paraphrase a popular Bruce Springsteen song, I’ll be talking with you “further down the road”.
I’ll end with my deepest best wishes for success in your new venture and for continued good health.
After giving some thought to the title I chose Until We Meet Again after a song that was sung by Roy Rogers & Dale Evans which was a childhood TV program I use to watch. I am not saying good by … but, what I am saying is that to do good commentary and quality post takes some time to put together. I try too to add some color to my post so others find some humor in reading them form some of my life’s true events. I’ve got a lot on my plate coming in the near future as you will see by reading on.
I’ll be retiring soon and have started my retirement celebration which I plan to continue for a good year. Part of the celebration is to return to golf more frequently than I have the past couple of years, restore a house in Charlotte that was built in 1938 and has been in my family since the mid sixties. The home was built by the late Joseph W. Ervin and wife Susan Graham. Joe was a former US Congressman and member of the 79th Congress who died on December 25, 1945 in Washington, DC. His brother, Sam Ervin, Jr. was elected to fill the vacancy caused by his brother’s death and sworn in on my birthday. This is how Sam first got to Washington. He later was elected to the US Senate and chaired the Water Gate Hearings where Richard Nixon resigned the Presidency.
Although, I am not related to the Ervin’s Joe and Susan had no children and their former home, purchased by my late parents, has been my home off-and-on since I was a teenager. Today, it is my primary residence and the home is indeed in need of a make over as its last renovation was done in 1990 during my father’s retirement. Giving this home a make over is part of my retirement celebration and hopefully in doing so it will get me through another twenty years or so as my homestead. It was named Ervin House in celebration of its neighborhood centennial in 2003 which was one of Charlotte’s original street car era neighborhoods. How many people can live in a home that has an Ervin family legacy? Being a born and bread North Carolinian this is indeed something special.
Another part of my retirement celebration is to do an update to my family’s coastal property that was built back in 1985 when my father retired. Although it is in a live able condition it needs some updating for it to become a home of warmth that one would find enjoyable to live in during extended visits.
And I did mention golf. Years back, in the 80’s, I was a weekend pro shop worker much like Ted is now. I did it for the golf and to be around the people in golf and not so much for the money although I did get paid well for what I did and then to have the free golf privileges at Kiawah Island. I usually played about 72 holes a week, or more, and carried a low single digit handicap. My job was to meet my company’s corporate jet when it flew in and to make sure all had a good time while they were in Charleston. Golf was a good part of this while they were in town and they seemed to always be looking for an additional player they felt, well they could “scalp.” Let me just say my old neighborhood buddy Leon Crump would have had a field day with these guys as I usually netted more in winnings than I had in losses. You also have know, its part of the game to lose some along the way otherwise you don’t get invited back with an opportunity to pick more form their pockets. You have to make them feel you just got lucky. Hell, little did they know, I was taught by the best, Clayton Heafner himself, in an old school way how to putt. And, even today this is the strength in my game. So my goal is to get my game back to where it was over the next year or so and in this way I can have some decent fun at the course. Maybe even net more than I lose. Anyway, that is my thinking … but, I’ve got to work on my game in the early evenings now that daylight savings time is here plus all of the above and some other stuff too.
I say again … Happy Trails To You Until We Meet Again. I’ll be lurking as some say.
Skeeter