Small Time Blog
I'll start by saying I love Dave Ramsey. He is truly someone who I admire and I do try to follow his advice about becoming debt free. I do not disagree with anything he says, but one thing he preaches is not to invest for yourself. I think this is great advice for most people, but by saying that no one can invest DIY, Dave is selling people short. He says that there are numerous studies (which I've not seen) that conclude individual investors buy high and sell low. I am not saying that people should drop all mutual funds, but I am saying that people should take a small percentage of their money and try to find opportunities to make a greater return than can be achieved through passive investing. Here are some examples from my own life where a little research went a long way and I did not risk the farm to do it.
|SIRI||SIRIUS XM HOLDINGS INC||200.0000||—||$789.75||$1,263.17||—|
|I took a small amount and made it a little bigger by paying attention!|
According to the Brookings Institute the global middle class could surge by 68% from 3.2 billion people today to 5.2 billion people by 2028. The global middle class is defined by people with the ability to spend $10-$20 per day. As an amatuer market observer and economist, this is no surprise to me, but it will be to almost everyone else in America. The Dow Jones Industrial Average is made up of 30 large multinational companies that are going to benefit greatly over the next decade. That is why I am making the call for 32,000 on the Dow by 2030. Some of the risk factors between now and then are visible now, such as the Syrian conflict, high sovereign and corporate debt levels, North Korea, a Chinese hard landing after years of growth, or India and Pakistan boiling over
I bought 50 shares of NVDA @ $33 per share in December of 2015 in my IRA account. I sold 25 of them @ $66 thinking hey, I doubled my money.......a mistake and a blatant disregard for the rules of owning a fast grower! Well the stock kept going and is now trading at over $215! The companys' market cap is $130 billion, roughly half the size of Intel Corporation (INTC) @ $213 billion. I expect Nvidia to equal Intel's size within a couple of years.
Either investors are naive, convinced it can't happen, or they are in the know about a diplomatic solution to The North Korean issue. I wish it were the diplomatic route but there is no way I can know that. I can only hope cooler heads will prevail and if they do, I believe equity markets could add another double digit percent increase in 2018. The alternative is mind numbing. A war in the far east is likely to disrupt the world economy in a very negative way. I could see a 15% plunge on the day of any military action on our part, only stopping there because the circuit breakers would kick in and trading would be halted. Never before in my investing life have I been so exposed to a downfall with all of my investable capital. It would take me 2 hours to sell 75% of all my stock holdings and go to cash and I am prepared to do it. Being the eternal optimist, I think we will see a coup attempt or pressure from Russia and China to diffuse the situation. I hope no one is prepared to use nukes to start a war. We have to trust in the leadership of our nation at this time because the decisions are all in their hands. The current administration is pro business and pro growth and I know they are aware of what a large scale military conflict would do to undermine their economic agenda. Our generals have stated that a war on the Korean peninsula would be catastrophic. Millions of casualties would result quickly and millions more would be displaced with just conventional weaponry warfare. Let's pray for peace and prosperity for the Asian world!
One of our longest holdings is starting to turn the corner. RVLT, an LED lighting solutions company. We have 125 shares in the Smalltime Model Portfolio and another 500 shares in my wife's IRA. Our average in price is $7.00. Could this one produce a multibagger? I believe the stock will go into the thirties over the next 4-5 years if the current plan stays on course. I am looking to add to this position soon before it breaks north of $9.00. This has not been an easy company to own, as it seems all good news is met with selling. In the immortal words of Michael Burry, of The Big Short movie fame, I might be early to this trade but I am not wrong! RVLT closed Friday August 5th at $7.32. Next stop $10....all aboard!