Global Macro Trading Journal

When a good level of financial freedom is achieved, the person could then move to a more all-wheater type allocation where there are more protections against tail events and just compound their money at lower rates, enjoy their extra free time, etc
 
Of course, most people don't have that kind of risk tolerance. They wouldn't be able to survive the drawdowns without panicking. But some people do, a good number of those people are Buffett followers. Like Bill Ackman. And that's why he is not a gambler who is about to go broke

Its that he and people like him have a far higher tolerance for risk and they are being judged in the media by people with a much smaller tolerance for risk
 
The thing is, even though I defend him, I still see some instances where he deserves criticism. But yet, I never hear about that criticism, usually its empty stuff with little or no relevance.

For instance, I believe his HLF short was a bad bet. Not because of the short itself but because if it turns out that he is wrong, he could be potentially be liable for damages to HLF. The damage could be in the range of billions. Now, there are a lot of counter points to that (chief among them the exposure that HLF would have by being forced to turn over confidential data to PSQ lawyers. they are likely to want to avoid that as the bad publicity could implode recruitment rates), also its PSQ (not PSH) who is behind the HLF attacks. PSH (back when it was private) wasn't even in operation when the HLF presentation happened. So the stock (PSH) might not even be involved in the litigation. They can also appeal for years, settle, etc.

So while I see some flaws in his decisions, usually, what people complain about has nothing to do with real flaws. It has more with do with human nature and why stocks overshoot during panics. It has to do with people's low risk tolerance and the fact that they get emotional during big price declines. It has to do with people liking to attack failure as a method to enhance their own ego, etc
 
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Even though I mentioned the 100% stock plan as a decent way for some young people to get rich, I'm of the opinion that real estate is still the best way for the average person to grow their wealth. As far as I know, thats most people in the US become millionaires

I really think people like Robert Kyosaki do a lot of damage when he says personal residences are not an investment. It is, its just that the return is hidden

Home prices tend to follow inflation, so right off the bat you have protection against inflation rare in other places (especially when you consider tax advantages vs bonds/tips). Then you have the hidden return which is the rent that you do not have to pay, you don't have to pay tax on this return. Sometimes you have expenses, of course, but a landlord also has them and he will embedded the rent price with these expenses, so a renter pays them too
A personal home/apartment is like owning a REIT with 100% a occupancy rate since you are always there, saving the rent cost, a tax free real return.

There are also other advantages like legal protections (homeowners are a significant % of the population and any attempt of the government to violate these property rights is likely to backfire), hyperinflation protection, the lack of price quotes (preventing emotional decisions). What you have here is a tax advantaged compounding machine that people actually stick with and don't sell! Now, maybe in some locations with high property taxes the case could be different but a lot of the time, its a pretty darn good investment

I say this even though I don't own real estate but my situation is different because I want to have a lot of margin avaliable in my accounts for trading/investing, etc

I'm referring to the primary residence here, if the person already owns their property with the mortgage paid off, then its a more difficult decision on where to invest next. I haven't thought too much about it but its an interesting question
 
This is not to say that borrowing 70%+ of the value of the home is good, I'm referring to buying with 100% cash or maybe 10-30% debt. Otherwise the interest cost offsets the rent saving
 
If I seem to be rambling about different unrelated things, its because I am. I just like to think out loud about different ideas on wealth compounding, investing, etc. Back in the day I would go back and forth with Ghost of Cutten on this type of stuff but I think he is gone from the earth or something. I used to email him a bit but then one day he just stoped replying and never showed up again in the forum. Its a shame, we used to kick around a lot of ideas about trading/investing
 
My own financial plan is to continue day/swing trade and produce income while on the investing side be conservative with a risk party/balanced type approach looking to make 4-6% a year with 10-12% max DDs. I do plan to swtich that conservative approach to a more aggresive allocation if at some point over the next few years we see a major dislocation and risk premiums rise a lot (prob will happen at the next US recession)

At that point I will take more risk in the investing side looking to catch a bull run over the next 2-5 years and then be able to pretty much 'retire' from active trading. I will still day/swing/macro trade but it will be just good opportunities here and there that I just can't pass up. Overall I will just go back to a conservative allocation looking for 5-6% with contained DDs and work less
 
Daal

You are indeed rambling but you are also throwing lots of ideas through that rambling so keep it going. :P

I would love to throw some ideas back and forth with you like with Ghost but I am still learning and new to the game so not much I can add at this moment without sounding stupid. At some point hopefully I will be able to throw you some ideas.

Till then keep writing whatever comes to your head and maybe Martinghoul instead of criticising could also throw some ideas of his own here and if these ideas are contradictory even better as we can get both sides of the coin.
 
Since you like throwing ideas and you talked about numbers lets see something imaginary. An uncle gave you $2 Billion (with a B). You decided to invest $1B in real estate (not REITs but directly to properties yourself eg an apartment in New York and so on) and left the other $1B for the markets. Now we assume that because of the fact that you are renting all your properties you have an absurd monthly income that can support your life forever. So you decide to be as aggressive as you want. You are investing as a family office so you can invest and have access to whatever you want like a normal hedge fund but you invest only for yourself not investors.

How would you invest your money both in bulls and bears?
 
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