Do you need reasons to hoard some cash?

Let me give you some.

//Thread//

Cash is priceless. It doesn't matter if the yield after inflation is negative.

Cash is an option on the future.

My cash holdings?

55%

A big cushion of cash can help you stay invested in riskier investments.

Equities for example.

You don't want to put a lot of money to work in overpriced instruments.

It is going to be way more destructive for you in the longer term.

Always remember.

It doesn't matter if the financial markets have been stable for decades.

The longer the stability, the bigger the jolt.

They can wash out the weak hands in a matter of few sessions.

Don't be that weak hand.

When stocks fell nearly 90% after 1929, Benjamin Graham, the founder of investment analysis, wrote that those with enterprise haven't the money, and those with money haven't the enterprise, to buy stocks when they are cheap.

By that, he meant simply that an investor who has courage but lacks cash is as powerless as one who has cash but no courage. It is hard enough to have the guts to buy stocks when they fall.

Cash is an optionality.

Like Taleb says -

If you "have [[optionality]]," you don't' have much need for what is commonly called intelligence, knowledge, insight, skills, and these complicated things that take place in our brain cells. For you don't have to be right that often.

If you liked the thread, I’m sure you’ll love my newsletter.

Join now. http://Contrarianliving.substack.com/