“You’ve got to know when to hold’em, know when to fold’em"
There is an old Kenny Rogers song from 1979, “The Gambler”. I must have heard it a million times at my mother’s house. The song is about two bored passengers on a train. The Gambler offers his fellow passenger some advice for the last drink of whiskey in his bottle, “You’ve got to know when to hold’em, know when to fold’em, know when to walk away, know when to run. You never count your money when your sittin’ at the table…the secret to survivin’, is knowin’ what to throw away, and knowin’ what to keep, cause every hand’s a winner and every hand’s a loser”.
I could not have said it better. The biggest mistake an investor can make in a bull market is to lose your positions. So, what and when do we sell? At Vista Investment Partners we believe you must have a sell discipline and follow it. We do.
As Kenny song says, “know when to walk away, know when to run”. There are times like the present, we become uncomfortable because of the magnitude of the move. We trust our indicators.
One of those indicators is what the individual investor is doing. Though this is hard to quantify, one way we can see this is the flows into and out of mutual funds. Last week more than $13 billion outflowed from equity mutual funds. That ranks in the bottom 3% of all one week periods. This is what we refer to as a contrarian indicator. It suggests this would be a good time to move money into the market. We are cautious here and do not advise being aggressive. We do see this as a confirmation to “know when to hold’em”.
Please contact us if you have any questions, or if your financial situations has changed since we last spoke.
Enjoy the day…r2