Mike Lipper’s Monday Morning Musings
Better Investment Thinking
Editors:
Frank Harrison 1997-2018, Hylton Phillips-Page 2018
The late and great Charlie Munger gave Warren Buffett his greatest
compliment when he called him a “thinking machine”. His compliment implies that
Warren is always thinking and trying to improve his investment process. In last
week’s post-script at the end of the blog I introduced the concept of needing
to focus on the process of selling. Early this week I had a conversation with
one of the more perceptive members of a monthly investment discussion group. He
was concerned that they hardly ever discuss the process of selling.
Selling is often prompted by the need to raise cash or the need to free
up cash for reinvestment. Currently, we have quite possibly entered a period
where it would be prudent to develop a meaningful cash reserve for later equity
reinvestment. Admittedly, it runs the risk of not fully taking advantage of the
rising stock market. It is with that thought in mind that I am
introducing the thinking of Professor George M. Calhoun, with some concern as
to the structural risk it might expose.
George’s views have been shaped by the following experiences.
- For 25 years George worked for various tech companies.
- He is a Professor at The Stevens Institute of Technology, where I am one of the trustees.
- At Stevens, George supervised the development of the Hanlon Financial Center, a live trading room.
- He won a National Science Foundation award for creating the Center for Research Toward Advancing Financial Technologies (CRAFT).
- George is a regular contributor to Forbes.
George Calhoun has written extensively on the causes of inflation, in discussions on: Dangers created by Money Market Funds, Cash Shortages, Recession Signal, Dry Powder, and Contrarian Indicator, parts of which are included in the link to the article below.
Collateral
Damage From Fed Policy (3) – Money Market Funds, A ‘Powder Keg’? (forbes.com)
Did you miss my blog last week? Click here to read.
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