Stock Market Portfolio 90% in Cash Because of Value Investing

TL;DR

A value investor explains why he is holding 90% cash in his stock market portfolio and discusses his investment criteria.

Transcript

good day fellow investors I recently mentioned that I'm 90% in cash when looking at my stock market allocation in my life plus some even will be selling my real estate and that might look like I'm a market timer but I'm not I'm a value investor and I want to explain in this video why am I so much in cash because that's how it happened it's not that... Read More

Key Insights

• ⌛ The value investor is not timing the market but rather patiently waiting for investment opportunities that meet his criteria.
• 🍹 The value investor has a lump sum and a small portfolio, with different risk tolerances and investment approaches.
• 👨‍💼 The investor prioritizes understanding the business, discount to intrinsic value, and long-term earnings yield when making investment decisions.
• 🛩️ The investor's risk tolerance is higher in the small portfolio, which represents a smaller portion of his net worth.
• 😥 The investor plans to increase stock market exposure based on finding stocks that meet his criteria or reach certain price points.
• 🤯 The investor highlights the importance of investing in great businesses to ensure peace of mind regardless of market conditions.
• 🫵 The value investor encourages viewers to check his stock market research platform for more insights and perspectives.

Questions & Answers

Q: Why does the value investor have 90% cash in his stock market portfolio?

The investor has a lot of cash due to selling off previous holdings, tax refunds, and an accumulated amount from being patient when deploying cash. It is not a result of timing the market but rather a part of his investing strategy.

Q: What is the difference between the value investor's lump sum portfolio and the small portfolio?

The lump sum portfolio is publicly launched and currently has only one position, while the small portfolio involves monthly additions over a longer period. The risk tolerance in the small portfolio is higher because it represents a smaller portion of the investor's net worth.

Q: When will the value investor increase his stock market exposure?

The investor will increase his stock market exposure when he finds stocks that meet his criteria or when certain price points are reached. It can be influenced by market conditions, but the focus is on finding businesses with good intrinsic value, earnings yield, and a margin of safety.

Q: What are the value investor's investment criteria?

The investor's criteria include understanding the business well, knowing its intrinsic value, a large discount to intrinsic value, willingness to invest a large part of net worth, minimal downside, moat, honest management, 15% earnings yield, positive tailwind in the sector, and manageable concerns.

Summary & Key Takeaways

• The content discusses the value investor's two stock market portfolios: a lump sum portfolio and a small portfolio with monthly additions.

• The value investor explains that he currently has only one position in his lump sum portfolio, as he sold off his previous holdings to balance risk and generate cash.

• The investor describes his approach of patiently waiting for investment opportunities that meet his criteria before buying, with the aim of finding great businesses at a large discount to their intrinsic value.