Icarus and Your Portfolio

Icarus and Your Portfolio. www.watchdogonwallstreet.com

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst and trader, Chris Markowski.

Speaker 2 (00:17):
Icarus and your Portfolio. Yeah, I'm going back in time here.
This is again I'm dating myself in decades. It's actually
even before I had a radio show late nineteen nineties
when I start the Markowski Monthly, That's what it was
back at that time. Now it's quarterly, but write on

(00:39):
a regular basis. It start at mid nineteen nineties and
all my columns are up there on our site, archived there,
and it was one I wrote this is here January
nineteen ninety nine. January of nineteen ninety nine. This is

(01:01):
right before what happened everybody. Yeah, I know Bush versus
Gore and Hanging Chance, but also the blow ups in
the dot COM's en Ron. Prior to this this article,
I wrote a column titled Understanding Enron, where we call
the demise of that as well. If you're not familiar

(01:23):
with the story, Icarus, I love Greek mythology, and well
surmise it here a young boy, he receives a pair
of wings. These wings allow him to fly like a bird.
Before he takes off on his first flight, his dad

(01:44):
warns him, don't fly too close the sun. Your wings
are going to catch fire and you're gonna crash and die.
What does the boy do? One ear and out, the
other takes off sorees higher and higher, pays no attention,
and wings catch fire, crashed and birds your portfolio. I've

(02:08):
tied this in before with fomo and a myriad of
other things. Certain positions you may have got involved with
that have done very well. We've seen many different assets
go for lack of a better phrase, pair aboloic, pair abolic.

(02:34):
There is nothing wrong with taking money off the table.
There is nothing wrong with hedging yourself. You are never
going to go poor taking profits. You're not, Like I said,

(02:55):
I've been doing this for some time, been doing this
for some I'm in nineteen nineties, nineteen nineties. I can't
tell you how many people didn't heed our warnings when
it came to taking profits. In a lot of the

(03:17):
dot com companies tech stocks from the day, worried about
the money that they weren't going to make down the road. Okay,
rather than the money that they already had made and
protecting that, and they got wiped out. And again a

(03:39):
wallpaper your bathrooms. I was telling people, you're going to
you know these things. I've taken a look at it.
Yeah it's up. Oh but Chris, you don't understand. I
was ridiculed. Worst period of time for my bit. Nineteen nineties.
Everybody was smarter than we were. Everybody knew exactly what

(04:00):
they were doing. Everything was going up and again in
that part of the hype machine. Right. Oh, it's a
new time. It's a new era. This time, it's different,
new paradigm. Earnings don't matter anymore, all of this crap. No,

(04:21):
they do, they do, and I don't. I don't care
what you feel. You listen, people, you have to protect
your downside. You have to. I watch the movement in

(04:42):
some of these companies right now. Actually Andy Kessler lamented.
But today his piece in the Wall Street Journal something
that I've been talking about for some time. He's talking
about the market as a whole and his belief that
the plumb sucks. The plumbing sucks, thinking of the movie

(05:06):
Moonstruck with Casserini there and his memories got the couple
and he's you know, scraping the pipe with his knife there,
and he was telling about what pipes that he uses,
and you know that he's a certain type of pipes. Well,
the pipes have changed when it comes to Wall Street.
The human beings aren't there anymore. They're not I saw

(05:35):
this coming in the late nineteen nineties. Again in New
York Stock Exchange is not the New York Stock Exchange.
It's a sound stage, not like they have specialists now
it's not. It's different that you have these high frequency

(05:57):
trading outfits, you have quant funds. You know, certain information
comes in one way, it can be interpreted in one way.
And again it's things can get hyped up and blown
out of proportion quickly. Again sub reference again you go
Ron Burgundy, okay, and Anchorman. After that they're big fight

(06:20):
there with the other networks board that has to escalated quickly.
Things escalate quickly, very very quickly. You can build a
lot of hype into something fast licket tea split, and
again that can go away lickety split. As well. I

(06:47):
have been beneficiary of certain stocks that have, let me
put it this way, gotten ahead of themselves. Not that
they're bad companies. Not that they're bad companies, they just
don't bit any overillime sig. And again, I have no

(07:08):
problem taking a profit in them, and I don't have
any problem seeing the stock go even higher after I've
taken a profit in them. This gets back to something
I like to talk about. And again, this is basic principles,
Benjamin Graham, principles of trying to get your arms around

(07:28):
the intrinsic value of something. What is that thing worth?
What is the intrinsic value of this company? Now? Benjamin
Graham's idea was, you know, well, assets have an intrinsic value.
Sometimes they trade below their intrinsic value, and the times

(07:51):
they trade above their intrinsic value. Hence the whole by
low sell high. You're taking a look at the numbers
of some of the these companies and you're saying, WHOA, what's
way out? They're way out ahead of their skis. When
it comes to value, it's okay. You can take a
profit if you own it. You can avoid it, Okay,

(08:12):
don't be fomo when it comes to your portfolio. Stick
to the rules, look for value. You do so, okay,
you are going to make money over time, you're going
to build wealth over time. You try to again play
the hype machine, the hype game. Good luck with that.

(08:36):
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