plasticsurgeryrox's Net Worth for July 2019


Assets Value Change ($) Change (%)
Cash $0 - -
Stocks $21,129,000 $1,368,000 6.92%
Bonds $0 - -
Annuities $0 - -
Retirement $0 - -
Home $2,200,000 - -
Other Real Estate $6,383,000 - -
Cars $0 - -
Personal Property $0 - -
Other $0 - -
$29,712,000 $1,368,000 4.83%
 
Debts Value Change ($) Change (%)
Home Mortgage(s) $0 - -
Other Mortgage(s) $0 - -
Student Loans $108,000 - -
Credit Cards $0 - -
Car Loans $0 - -
Other $6,576,000 ($152,000) (2.26%)
Total Debts $6,684,000 ($152,000) (2.22%)
Net Worth $23,028,000 $1,520,000 7.07%
*All values shown in USD ($)
Notes:
6/28/19 June was a good month. Market is fairly priced now I think. 0.4 coin. 2020-1 ern, 0.7 lon 1ern 5.5 sto 0.2 bak 0.2 laun

Comments

7/12/2019 12:47:36 PM auzzieyank
Is it fairly priced? https://www.multpl.com/shiller-pe
7/13/2019 8:15:27 AM plasticsurgeryrox
I think so. Its even gone up since 6/28. I prefer looking at s&p forward P/E which is about 17-20. I believe since 2008 we've been so conditioned to look for any negativity that people are afraid to invest. That being said, it is possible the market can get a little ahead of the economy but long term moving forward I think the US s&p 500 has been and will continue to be the best place to put ones money.
7/13/2019 12:47:03 PM gmt
Setting aside whether an existing forward p/e of 17-20 is unduly high, the problem is that forward p/e's are almost always overly optimistic guesses about future earnings. More importantly, consider people who value businesses professionally, and investor thoughts on buying a private business. Businesses are typically sold based upon a multiple of their prior earnings, not based upon the owner's rosy estimate of future earnings. Sure, we can consider prospects for future growth and we might pay a slightly higher multiple for a company with meaningful growth prospects, but when evaluating private businesses we are generally guided by paying a multiple of a business's prior earnings (the more solid the business, the higher the multiple). The same is true of the public markets. In addition, in every recession I've looked at, forward p/e's were always way too optimistic. Does forward p/e have a place? Maybe, but its certainly not at the head of the table. Also, while I don't think you
7/13/2019 12:47:34 PM gmt
Also, while I don't think you're wrong about people having been burned in 2008, etc., the fact is we're in a record-long bull market and the market is cyclical. Being "afraid to invest" in an overvalued environment based on FOMO is not a bad thing: be fearful when others are greedy, and greedy when others are fearful. For people with a 20-year investment horizon and the genuine ability to weather a 40% drawdown without giving themselves an ulcer, investing in the S&P is a no-brainer. For others, discretion is the better part of valor. More analysis here: https://www.advisorperspectives.com/dshort/updates/2019/07/01/is-the-stock-market-cheap
7/13/2019 6:13:17 PM plasticsurgeryrox
everything you say is true. i guess my approach is believing to always stay in the market. I try to avoid selling stocks in general. I believe in a 100 year (lifetime) investment horizon and not 20 years. In that case, the stock market should always beat out bonds, gold, real estate and cash. Even if you went all in on S&P500 in 2007 before the crash, you would be up over 100% today, beating any bond return. i think anyone who cannot weather a 40% drawdown (or temporary lowered valuation) is probably living beyond their means (and most people may be doing so). My investing advice for most people is to aggressively invest in the stock market through an index fund and not buying any bonds. This has to be done in conjunction with being aggressive about cutting spending and minimizing ones expenditures (thats key!!!). I can speak from my perspective, starting with zero cash, zero assets and school debt, and this is the formula that has worked for me.
7/13/2019 7:41:38 PM gmt
Thanks for responding. I'd like to address two things. First, "I believe in a 100 year (lifetime) investment horizon." Really, even as you approach 50? I guess you're not investing for your future, but some future generation. That's fine, but I'd like to retire one day--spend time volunteering, gardening, sailing, teaching, writing, traveling, etc., and there will come a time when I'll need my money to pay for my lifestyle. If your timeline is really infinite, then you're no doubt doing it right--of course, we won't be around to know one way or the other in another 50 years. I just question whether it's truly advisable to invest the same way at 50, or older, as it is at 20. Oh, and as an estate lawyer once told me, "fly first class or your heirs will." I don't fly first class, but I'm also not saving for my heirs.
7/13/2019 7:45:18 PM gmt
Second, "anyone who cannot weather a 40% drawdown (or temporary lowered valuation) is probably living beyond their means." I don't think it's that simple. I don't touch my investments or any income from them; that money is for future use only. Yet, it would be disheartening for me to see my accounts down 40% and, while we've been lucky to have V-shaped stock recoveries the last 20 years or so, that's not always been the case and I'd not expect it always to be the case. In 2009, the S&P took prices back to 1996 levels. It was conceivable that it would take 20 or more years to recover--that is, to get back to breakeven money. Yet, it only took 5 years. Even if you stayed fully invested during that time (most obviously didn't), if you had retirement plans in the decade following the crash, your plans were likely altered. My ultimate point, however, is that there's nothing wrong with admitting it would be devastating to experience a 40% drawdown, that it would be hard for most peop
7/13/2019 7:45:37 PM gmt
My ultimate point, however, is that there's nothing wrong with admitting it would be devastating to experience a 40% drawdown, that it would be hard for most people to weather that storm even if they didn't need immediate access to that money, and that it is prudent to avoid buying stocks, even index funds, in an overvalued, aging bull market when you when you're closer to looking for the off-ramp of the daily grind. For my girls, who are 18, with no responsibilities and an easier ability to recover from a bear market, 100% S&P index funds is fine. For me, not so much.
7/13/2019 7:57:59 PM gmt
In the end, I'd simply advocate for a traditional balance between stocks and bonds that is commensurate with age, income needs, and valuation. After many years on the equity side of things, I'm admittedly much more heavily on the bond side now. It's been great, even though I've missed out on the feeding frenzy over the last year or two in the S&P. I'm happy with the total returns which, on a tax adjusted basis for the last 12 months, are nearing 10%. The lack of volatility is nice too. There will come a time when I get back into the stock market in a more meaningful way, though I doubt it will ever be more than 30-40% of my investment portfolio, but that will require valuations to be more attractive.
7/19/2019 10:39:20 AM ataraxia
The 40% draw down comment caught me. Especially at both your levels of net worth. I would have thought it wasn't so much about whether a 40% drawdown would affect affording your day to day lifestyle, but how it affected you psychologically. I want to believe that I have a good many decades to hold my equity position and fully subscribe to the idea that in the long run, equities beats all other asset classes in return. That being said 40% draw down would be emotionally devastating, I've had weeks of double digit drawdowns that have emotionally rocked me despite the fact that it would not have affected my ability to afford my day to day lifestyle.
7/19/2019 10:40:09 AM ataraxia
Because of that, despite barely being 30, I have a fairly conservative portfolio with a disproportionate percentage of fixed income. I definitely agree that long run equities are the better return, but emotionally, I couldn't afford it. Periods of volatility would distract me from focusing on my business to watch markets and the prices of other peoples business. At my stage of still trying to grow a business with many challenges, I don't believe it's the best split of attention.
7/19/2019 10:40:28 AM ataraxia
Additionally, while I have a lot of fixed income / real estate assets relative to stocks, they are leveraged positions so the risk isn't totally off. There's something to be said in looking at diversified / efficient portfolios that can be levered up to the volatility level you can tolerate.
7/19/2019 10:41:57 AM ataraxia
Really interesting to hear your comment plasticsurgeryrox about being okay with a 40% drawdown. Certainly you would be financially, but psychologically? I looked at your profile gmt but I guess not much of your net worth is in equities aside from your retirement? It seems mostly in "Other" and "Cash"
7/20/2019 10:44:51 AM gmt
You're right but the labels, in my case, are not very informative. "Other" represents the equity in my law firm. "Cash" mostly represents muni bond holdings along with a secured hard money lending portfolio. I don't have meaningful cash holdings right now, although I'm building a cash position that, by years end, will be about $2MM (I'm having a banner year). My plans are to quit working in less than 10 years and go sailing and traveling around the world. To live full time, not work full time. I think investment horizon is a very important part of any asset allocation, particularly given the current market and economic conditions, but your thoughts on maintaining focus, psychological integrity, and recognizing other types of risk make perfect sense too. But, so does your relative wealth: know when you've won the game, then stop playing (and stay rich).
7/20/2019 11:28:29 AM plasticsurgeryrox
Wow. I think this conversation is the most traffic this site has seen :) Let me clarify some of my previous comments. When I say my 100 year horizon, I am discussing things from a mathematical standpoint. Any investment is a coin flip... whether its stocks, bonds, cash, gold, etc. Stocks are more likely to flip "heads" than other investments. So if you look at things from a hundred year or infinite horizon, why would you invest in anything other than the "coin" thats most likely to flip "heads". GMT, I'm not worried about saving for my heirs... I'm most worried about keeping up with inflation and I mean real inflation. Costs of private school, prime real estate, premier vacations, unique experiences, etc. are skyrocketing much faster than generic inflation. I dont want to be left out. I feel that equities best keep up with inflation more than any other asset class.
7/20/2019 11:33:02 AM plasticsurgeryrox
ataraxia, i understand your psychological feelings with a decrease in value. I've experienced this many times myself. With age, I am getting better at weathering these minor storms and holding for the long term. You know, I've had drops in real estate as well... however, you dont see those drops day to day like you do with equities. Real estate drops occur more on a yearly or decade basis. I still believe that long term equities are a better bet than any other asset class and it has definitely played out with myself and my friends and pretty much anyone I know (even big real estate developers). Most people invest in real estate though as that is the easiest place for people to get leverage when they invest.