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Ante omnia armari

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Thursday, September 4, 2008

Dumb Luck Investing Update

This afternoon I closed out some bond funds and moved more cash into the equities; I love days when all major market indicators dive. Today the Dow, S&P-500, and NASDAQ all took a 3% trimming; I believe all markets are once again back into true bear-market territory, 20% or more off their respective market highs. Dumb luck still has me down only 2% from my portfolio highs, but my benchmarks say I am 7% below portfolio minimum goals; it was time for another adjustment.

Restating for the record, the total value of my portfolio is very modest. It is large enough to provide me with retirement security should my pension not keep up with inflation. It is small enough for me to avoid mental irregularity if my luck goes polar-south. It keeps me busy and it is fun.

Is this “Dumb Luck Investor” calling a bottom to the stock markets? Nah, I don’t look for bottoms or tops, I just make random purchases and sales with the market trends. My instincts tell me not to be surprised if the markets eventually capitulate with another 5% - 10% to the downside. I’m a contrarian; when we all believe that investors are doomed, the markets will then make fools of us all. Are the markets making a statement against Obama or McCain? Pundits have tossed that card in both directions, I believe the markets don’t really care who wins. I do believe that the markets don’t like doubt; markets simply don’t like not knowing who will win. Once one or the other candidate is the obvious winner, then doubt is out of the process and the markets can move on to other distractions. The markets do seem to enjoy a gridlocked government when the president is from one party and the other party controls congress, but that lucky event easily runs aground with the inept economic piloting of our bipolar Federal Reserve Board of Governors.

Currently I am still comfortably conservative, 55% cash, 45% equities. Will I ever go 100% equities? At this point in my life in this crazy world, I doubt it, but if I see the market go low enough to where people are jumping from tall buildings I may give it a go.

DISCLAIMER: None of this is advice; we all are truly on our own.

James A. Zachary Jr.

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