No. of Recommendations: 1
Thanks for all of your feedback.
Some additional points of clarification and thoughts.
1) When considering using equal weighted indexes, my concern is that many if not half of the S&P 500 never seem to appreciate over time. For example, the autos have gone no where for over 10+ years. Same as GE, in spite of recent rally. Banks as well. Polaris also comes to mind. I have read research that this observation is true. So emphasizing the whole group equally instead of allowing the few stalwarts to shine may have adverse consequences. Of course it is tough to gauge if the largest market caps are more overvalued than the average company verse their prospects. Last night I reread parts of Chris Bloomstrans annual write-up. He tried to address the point of potential overvaluation of the fab 5 or 7? He argued strongly that his portfolio of low leverage, low P/E stocks should outperform over time. But then I look at his performance and to be frank, mine is better over the past 15 years.
2) I am fully invested plus a little margin as I write. But on January 19, I have many covered calls that as of today's prices will be exercised and I will have almost 15% cash. This is one of the impetus for me considering a change. So most of my MSFT, GOOGL, and APPL will be exercised away. When I look at those stocks, I ask will I want to buy them back at current prices and my answer is no. So where do I deploy the cash? Of course implementing this plan will eventually require me to sell off some BRK. This I have been reluctant to do so far. I continue to sell covered calls. Most recently Jan 2025 500 calls for $1.80 ish.
3) I have plenty of losers in my portfolio as well. Some I have lost over 80%. Mostly biotechs. Banks have been a rough rides as well, but other than BAC they are all up at this point. I guess I am just beginning to accept that you can never know enough about an investment to avoid loss. My son is a flipper of motorized things and I always tell him the seller always knows more than the buyer. Keep that in mind when determining a price. So in spite of my investment performance, which has been more than satisfactory, is it worth it to take on all of the time commitment and stress to make an extra percentage or two over the S&P 500. Corollary, management always knows more than the investor when it comes to companies. It is fun and entertaining most of the time, but can be very frustrating as well. (That is why I quit rotisserie baseball 15 years ago. All the strategy and planning and then no consistent performance.)
4) So my goals while still evolving are coming from these perspective.
