Waiting For a Fat Pitch

On the latest episode of Animal Spirits, Ben and I spoke the seduction of sitting in cash and waiting for your pitch.

Somebody on YouTube commented:

I waited 6 years for the dow to fall back to 18k support. it finally dipped to 18k . . i still didn’t buy

I feel for this person. It’s reasonable in theory to tell yourself that the market is too high and to wait for a more attractive entry point. The problem is, very few people are able to do this in real life. The more balls you take, or strikes in this case, the harder it becomes to swing.

If you’ve been sitting in cash for too long, the only way to get back in is to do so with a plan, and slowly over time. I understand that there is a cost to waiting, as opposed to lump sum investing, but that is nothing compared to the cost of getting back in before you’re ready and blowing out at the first sign of trouble.

This week we also covered Robert De Niro going broke, and the gambling mentality of Robinhood users.