J.C.’s Money Blog

The market was up quite a bit the last two days, so for now my SPY purchase looks like impeccable market timing: +3.85% in two days. That always feels good, even though I know I can’t do it repeatedly. I am tempted to dump the shares I just bought for a quick profit. So I need some wisdom to keep me in line:

“Success in investing doesn’t correlate with I.Q. once you’re above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.”

- Warren Buffet

I’ll hold on a little longer, since my IQ is at least twice Warren Buffet’s requirement, my main problem is temperament control.

Also, even though I just bought some stock, I should be hoping for the stock market prices to go down further.

“If you expect to be a net saver during the next 5 years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.”

- Warren Buffet

If I were asked, I would get this question right, but I still love to watch my portfolio gain in value, and get a bit disturbed after it loses value (but then I tell myself that’s good for me and I’m happy again).