BennyEast.Com/Blog The official blog of Kenny West

22Mar/180

More or Less

Today the stock markets fell... It's a shit show if you ask me... hey, I didn't vote for him.

Anyway... The investments which I have control over, real quick, I have no control over my trust investments, so I just have to trust the bank and let that portfolio manager do his job.

My goal anyway, has always been to grow my own portfolio, which I do have control over, beyond the trust portfolio, so I'm just using that as a benchmark for comparison.

Today, while the markets did fall and the S and P 500 was down 2.5 or so percentage points... My own personal portfolio, which I have control over, was only down .5 percent.

Plus I raked in 2 dividend checks.

Here's the thing that gives me the advantage... I have no boss when it comes to investing.  Most money managers have bosses, either they have people above them in the organization who are pushing them, or they have clients...

For my portfolio?  I'm my own boss, as I'm the person in charge.  I do all the analysis, I do all the buying and selling, and I'm the only client... Since I'm investing all the money, and the only person who's money it is, I can be MUCH more patient with my investments... I'm a one man band, just like the way I make music... I'm the writer, producer, studio musician, engineer... The 10 dollars I made the other day from music streams is actually WAY more money because I have basically no costs.

If you're in a band and you are signed to a major label, and you have a manger, and a PR person, and a digital marketing firm, and studio recording engineers, and the list goes on and on... All those people gotta get paid.

Even if my music isn't nearly as good as professional recording... and I make 10 bucks, my costs weren't nearly what professional musicians are.  What's the difference between me making 10 bucks, and having no costs... Versus a pro musician making a million and 10 dollars, but having a million dollars in costs.

Profit is still 10 bucks.

:)

It's like, if you get a job that is an hour commute and you are making 3 grand more a year when you take that job over your old job that was down the street... Gas, time, car maintenance... Etc. etc.

You're spending that money you made.

It's a net zero gain. might as well have stayed where you were.

Anyway, the same can be said about investing... All these people take more risks... I lost .5 percent today, general money managers lost 2.5 percent.

And on top of that, most professional managers take a fee.  I know my trust fee is taking 1.25 percent to manage the trust.

That means, even if the trust manager is better than me by 1.25 percent, we still have the same batting average.

It's Spring, so, might as well use a baseball sports metaphor.

That 1.25 percent compounds year over year... Making it that I don't have to be nearly as good as the money manager to beat the returns.

Which is part of what I do, my last actual trade was in January when I boosted a position in one of my REITS to increase the monthly income to boost my cash.

Which is another thing I'm doing... I'm holding more cash.  Most people are all in... But.. I don't buy the hype.

I started trading back in 2006... I watched things go crazy town.

So anyway, basically the way I look at things is, you can do a lot of work, to make a lot more... But have higher costs...

This is the NYC/LA/Miami mentality... You work like crazy to afford all this super fantastic lifestyle....

Or, you can work less, and do less, and still reap the same earnings per share.

Personally, I don't understand the glitz and glam.  If you close your eyes and it tastes the same... What's the difference?

Why do all that extra work?

If you're going to make 10 dollars in profit either way, why have a million and 10 dollars in sales if your costs are going to be a million...

Just have 20 bucks in sales, and spent 10 bucks to make that 20.

You still made 10 bucks.

You're doing way more work, to still make less.

As the saying goes... Sometimes, less is more.

 

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