Rich people are hoarding cash

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Mr.BB
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Re: Rich preparing for market drop

Post by Mr.BB » Thu Nov 14, 2019 5:09 pm

CyclingDuo wrote:
Thu Nov 14, 2019 7:53 am
Tommy wrote:
Wed Nov 13, 2019 11:56 pm
Mr.BB wrote:
Tue Nov 12, 2019 9:40 am
Can you find me an article like that from 2007? I would be more impressed with that.
I do remember similar article around 2015- that crash is coming and rich people hoarding cash
To couple with some of those similar articles - especially those who started getting rather vocal in 2014-15 regarding a crash is coming - I thought this graphic illustrates the consequences of listening to such predictions.

Armageddonists...

Image
https://www.marketwatch.com/story/heres ... 2019-11-13
It would be interesting to see if all those investing experts actually drank their own Kool-aid, and if they did how much did they end up losing?
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sperry8
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Re: Rich preparing for market drop

Post by sperry8 » Thu Nov 14, 2019 5:27 pm

CyclingDuo wrote:
Thu Nov 14, 2019 7:53 am
Tommy wrote:
Wed Nov 13, 2019 11:56 pm
Mr.BB wrote:
Tue Nov 12, 2019 9:40 am
Can you find me an article like that from 2007? I would be more impressed with that.
I do remember similar article around 2015- that crash is coming and rich people hoarding cash
To couple with some of those similar articles - especially those who started getting rather vocal in 2014-15 regarding a crash is coming - I thought this graphic illustrates the consequences of listening to such predictions.

Armageddonists...

Image
https://www.marketwatch.com/story/heres ... 2019-11-13
One of the best graphs I've ever seen! Could easily add in many more people who made bearish calls during this bull market. The takeaway? Not one of these billionaires, Nobel laureates, etc. can time the market. So what makes any of us think we're smarter or more capable. We aren't, no matter what our ego tells us. Set your AA properly and then stay the course!
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Bluce
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Re: Rich people are hoarding cash

Post by Bluce » Thu Nov 14, 2019 5:33 pm

And let us not forget: Interest rates are no easier to time than stock prices.

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CyclingDuo
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Re: Rich preparing for market drop

Post by CyclingDuo » Thu Nov 14, 2019 6:00 pm

sperry8 wrote:
Thu Nov 14, 2019 5:27 pm
CyclingDuo wrote:
Thu Nov 14, 2019 7:53 am
Tommy wrote:
Wed Nov 13, 2019 11:56 pm
Mr.BB wrote:
Tue Nov 12, 2019 9:40 am
Can you find me an article like that from 2007? I would be more impressed with that.
I do remember similar article around 2015- that crash is coming and rich people hoarding cash
To couple with some of those similar articles - especially those who started getting rather vocal in 2014-15 regarding a crash is coming - I thought this graphic illustrates the consequences of listening to such predictions.

Armageddonists...

Image
https://www.marketwatch.com/story/heres ... 2019-11-13
One of the best graphs I've ever seen! Could easily add in many more people who made bearish calls during this bull market. The takeaway? Not one of these billionaires, Nobel laureates, etc. can time the market. So what makes any of us think we're smarter or more capable. We aren't, no matter what our ego tells us. Set your AA properly and then stay the course!
With regard to your bolded statement, that's always easy to add. I haven't done a recent search for an updated one that covers up to November of 2019, but this one illustrates there are many repeat offenders (Armageddonists) along the way with their predictions and calls....

Image

More reading here...

https://am.jpmorgan.com/blob-gim/138364 ... sts_AM.pdf
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hdas
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Re: Rich people are hoarding cash

Post by hdas » Tue Jan 14, 2020 2:28 pm

Just to make a note that this article was an excellent contrarian indicator. Cheers :greedy
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firebirdparts
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Re: Rich people are hoarding cash

Post by firebirdparts » Tue Jan 14, 2020 2:39 pm

The secret to a rain dance is to keep dancing. Sometime or another, it'll rain.
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TomCat96
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Re: Rich people are hoarding cash

Post by TomCat96 » Tue Jan 14, 2020 2:59 pm

Rich people hoarding cash is a bullish signal.

It's when the rich people are all in, where then is no more money sitting on the sidelines to buy up the market that you should be worried.

Broken Man 1999
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Re: Rich people are hoarding cash

Post by Broken Man 1999 » Tue Jan 14, 2020 3:08 pm

Well, if only we held cash, perhaps we would be rich, also!

We only hold cash for about two weeks, so I guess we aren't rich.

Dang! :oops:

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willthrill81
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Re: Rich people are hoarding cash

Post by willthrill81 » Tue Jan 14, 2020 3:23 pm

Broken Man 1999 wrote:
Tue Jan 14, 2020 3:08 pm
Well, if only we held cash, perhaps we would be rich, also!

We only hold cash for about two weeks, so I guess we aren't rich.

Dang! :oops:

Broken Man 1999
Ditto. Our checking account runs very lean. I'm not saying that cash is trash, but... :twisted:
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azanon
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Re: Rich people are hoarding cash

Post by azanon » Tue Jan 14, 2020 3:28 pm

TomCat96 wrote:
Tue Jan 14, 2020 2:59 pm
Rich people hoarding cash is a bullish signal.

It's when the rich people are all in, where then is no more money sitting on the sidelines to buy up the market that you should be worried.
This for sure.

I've been hearing about this too watching CNBC, so this is the immediate thought I have. The bull's is likely going to continue until everyone decides that they're missing out, and invests all of that cash.

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Bluce
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Re: Rich people are hoarding cash

Post by Bluce » Tue Jan 14, 2020 3:41 pm

*YAWN*

LOL @ "the rich." Who are they?

Why would they be hoarding cash? Their lifestyles aren't, as a whole, any different than anybody else's aside from the scale: More expensive houses, cars, clothes, bigger boats, more lavish entertainment, etc.

And that's not even counting the people who are "rich," but you would never know it from looking at them or their lifestyles.

If "the rich" have an AA that they stick to, then that's where their money is. If they are traders or market timers, then that's where they are. I doubt the ratios of those two habits are markedly different from any other economic group.

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willthrill81
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Re: Rich people are hoarding cash

Post by willthrill81 » Tue Jan 14, 2020 4:51 pm

In some ways, a significant allocation to cash seems most logical for the relatively poor and the very rich. The poor don't have the luxury of investing what little cash they have, and the very rich can probably afford to deal with 'cash drag'.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

afan
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Re: Rich people are hoarding cash

Post by afan » Tue Jan 14, 2020 6:02 pm

Has nothing to do with being rich but the yield curve is pushing many people to put a large portion of fixed income in short term. Vanguard money market has the same yield as total bond, with no volatility, no interest rate risk and attenuated credit risk.
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watchnerd
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Re: Rich people are hoarding cash

Post by watchnerd » Tue Jan 14, 2020 6:03 pm

Tommy wrote:
Thu Nov 14, 2019 12:02 am
sl5050 wrote:
Tue Nov 12, 2019 12:44 pm
How do rich people actually hoard cash if the FDIC only insures up to 250k?
I really doubt that somebody with 1M has 250K in cash -
Oh, I dunno about that.

"Working capital" is something we accumulate, along with acquaintances of ours.

Friends who are into real estate investing use it to buy properties when the timing is right. We use it for angel investing, and sometimes PE.
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Re: Rich people are hoarding cash

Post by sailaway » Tue Jan 14, 2020 6:15 pm

watchnerd wrote:
Tue Jan 14, 2020 6:03 pm
Tommy wrote:
Thu Nov 14, 2019 12:02 am
sl5050 wrote:
Tue Nov 12, 2019 12:44 pm
How do rich people actually hoard cash if the FDIC only insures up to 250k?
I really doubt that somebody with 1M has 250K in cash -
Oh, I dunno about that.

"Working capital" is something we accumulate, along with acquaintances of ours.

Friends who are into real estate investing use it to buy properties when the timing is right. We use it for angel investing, and sometimes PE.
My parents don't even have $1m, but they are very conservative and have more than $250k in CDs, checking and savings. They just make sure not to have more than $250k in any one institution.

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willthrill81
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Re: Rich people are hoarding cash

Post by willthrill81 » Tue Jan 14, 2020 6:32 pm

sailaway wrote:
Tue Jan 14, 2020 6:15 pm
watchnerd wrote:
Tue Jan 14, 2020 6:03 pm
Tommy wrote:
Thu Nov 14, 2019 12:02 am
sl5050 wrote:
Tue Nov 12, 2019 12:44 pm
How do rich people actually hoard cash if the FDIC only insures up to 250k?
I really doubt that somebody with 1M has 250K in cash -
Oh, I dunno about that.

"Working capital" is something we accumulate, along with acquaintances of ours.

Friends who are into real estate investing use it to buy properties when the timing is right. We use it for angel investing, and sometimes PE.
My parents don't even have $1m, but they are very conservative and have more than $250k in CDs, checking and savings. They just make sure not to have more than $250k in any one institution.
There isn't much, if any, difference in current bond and CD yields. Quite often, CDs have had higher yields than bonds of the same maturity. Larry Swedroe's firm frequently recommends CDs to their clients.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Rich people are hoarding cash

Post by abuss368 » Tue Jan 14, 2020 6:46 pm

I prefer the flexibility of money market and bond funds. Have not owned a CD in over 20 years.
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2pedals
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Re: Rich people are hoarding cash

Post by 2pedals » Tue Jan 14, 2020 6:53 pm

....10 o'clock news is next don't go away, .... rich people are greedily hoarding expensive toys, expensive houses, expensive vacations and beautiful people.

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Bluce
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Re: Rich people are hoarding cash

Post by Bluce » Tue Jan 14, 2020 7:21 pm

abuss368 wrote:
Tue Jan 14, 2020 6:46 pm
I prefer the flexibility of money market and bond funds. Have not owned a CD in over 20 years.
I'm letting my CD ladder run out; there's one left than comes due the end of March and it will go back into bond funds.

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Bluce
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Re: Rich people are hoarding cash

Post by Bluce » Tue Jan 14, 2020 7:23 pm

2pedals wrote:
Tue Jan 14, 2020 6:53 pm
....10 o'clock news is next don't go away, .... rich people are greedily hoarding expensive toys, expensive houses, expensive vacations and beautiful people.
LOL.

"Hoarding" is a personal trait (don't ask me how I know) and has nothing to do with how much money one happens to have.

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willthrill81
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Re: Rich people are hoarding cash

Post by willthrill81 » Tue Jan 14, 2020 7:26 pm

Bluce wrote:
Tue Jan 14, 2020 7:21 pm
abuss368 wrote:
Tue Jan 14, 2020 6:46 pm
I prefer the flexibility of money market and bond funds. Have not owned a CD in over 20 years.
I'm letting my CD ladder run out; there's one left than comes due the end of March and it will go back into bond funds.
Why, out of curiosity?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Bluce
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Re: Rich people are hoarding cash

Post by Bluce » Tue Jan 14, 2020 7:48 pm

willthrill81 wrote:
Tue Jan 14, 2020 7:26 pm
Bluce wrote:
Tue Jan 14, 2020 7:21 pm
abuss368 wrote:
Tue Jan 14, 2020 6:46 pm
I prefer the flexibility of money market and bond funds. Have not owned a CD in over 20 years.
I'm letting my CD ladder run out; there's one left than comes due the end of March and it will go back into bond funds.
Why, out of curiosity?
Because the new ones aren't paying anything. These are all within my SEP; I'm at Schwab (there may be higher ones elsewhere) and the highest one-year available now is 1.75%, the one coming due is 2.5%. I did have a one-year yielding 2.75% but they started declining after that.

Just for kicks, I just averaged my bond fund TTM distribution yields (30-day isn't available for all of them): It is 3.91%.

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Re: Rich people are hoarding cash

Post by KyleAAA » Tue Jan 14, 2020 8:03 pm

greg24 wrote:
Tue Sep 10, 2019 9:19 am
ThereAreNoGurus wrote:
Mon Sep 09, 2019 10:32 pm
mrspock wrote:
Mon Sep 09, 2019 10:18 pm

Don’t let the Boglehead crowd skew your reality.... very few people will ever see 7 digits of investable assets.
I'm not so sure about that. According to this link: https://dqydj.com/net-worth-by-age-calc ... ed-states/

For those between the ages of 50-54 (excluding home equity) one million dollars puts you in the 90th percentile
55-59 85th percentile
60-64 84th percentile
65-69 86th percentile
70-74 86th percentile

I think that is more than a very few.
Spock said 7 digits of investable assets.

You list those with a net worth of 7 digits.

There is a HUGE difference. Many of those with a NW in the 7 digits are primarily driven by home equity.
Sure, but how does one define "very few?" Does the top 1% qualify as "very few?" The top 5%? The top 0.1%?

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ThereAreNoGurus
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Re: Rich people are hoarding cash

Post by ThereAreNoGurus » Tue Jan 14, 2020 8:10 pm

KyleAAA wrote:
Tue Jan 14, 2020 8:03 pm
greg24 wrote:
Tue Sep 10, 2019 9:19 am
ThereAreNoGurus wrote:
Mon Sep 09, 2019 10:32 pm
mrspock wrote:
Mon Sep 09, 2019 10:18 pm

Don’t let the Boglehead crowd skew your reality.... very few people will ever see 7 digits of investable assets.
I'm not so sure about that. According to this link: https://dqydj.com/net-worth-by-age-calc ... ed-states/

For those between the ages of 50-54 (excluding home equity) one million dollars puts you in the 90th percentile
55-59 85th percentile
60-64 84th percentile
65-69 86th percentile
70-74 86th percentile

I think that is more than a very few.
Spock said 7 digits of investable assets.

You list those with a net worth of 7 digits.

There is a HUGE difference. Many of those with a NW in the 7 digits are primarily driven by home equity.
Sure, but how does one define "very few?" Does the top 1% qualify as "very few?" The top 5%? The top 0.1%?
LOL... that is an old post. I followed it up by pointing out all of those percentiles excluded personal home equity.
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watchnerd
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Re: Rich people are hoarding cash

Post by watchnerd » Tue Jan 14, 2020 8:15 pm

ThereAreNoGurus wrote:
Tue Jan 14, 2020 8:10 pm


LOL... that is an old post. I followed it up by pointing out all of those percentiles excluded personal home equity.
I don't know why people are obsessing over the micro details of the definition of HNWI instead of talking about why they have sizable chunks of cash.

Seems a bit like not seeing the forest for the trees, TBH.
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Re: Rich people are hoarding cash

Post by abuss368 » Tue Jan 14, 2020 8:16 pm

Bluce wrote:
Tue Jan 14, 2020 7:21 pm
abuss368 wrote:
Tue Jan 14, 2020 6:46 pm
I prefer the flexibility of money market and bond funds. Have not owned a CD in over 20 years.
I'm letting my CD ladder run out; there's one left than comes due the end of March and it will go back into bond funds.
Are you simplifying?
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Re: Rich people are hoarding cash

Post by abuss368 » Tue Jan 14, 2020 8:16 pm

watchnerd wrote:
Tue Jan 14, 2020 8:15 pm
ThereAreNoGurus wrote:
Tue Jan 14, 2020 8:10 pm


LOL... that is an old post. I followed it up by pointing out all of those percentiles excluded personal home equity.
I don't know why people are obsessing over the micro details of the definition of HNWI instead of talking about why they have sizable chunks of cash.

Seems a bit like not seeing the forest for the trees, TBH.
That is reasonable. Instead of a threshold more of a strategy based on market timing.
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Bluce
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Re: Rich people are hoarding cash

Post by Bluce » Tue Jan 14, 2020 8:18 pm

The whole "the rich" thing is a canard and a completely useless phrase IMO.

In political and pop-culture terms, it is anyone who has a dollar more than you do.

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Re: Rich people are hoarding cash

Post by TheTimeLord » Tue Jan 14, 2020 8:21 pm

watchnerd wrote:
Tue Jan 14, 2020 8:15 pm
ThereAreNoGurus wrote:
Tue Jan 14, 2020 8:10 pm


LOL... that is an old post. I followed it up by pointing out all of those percentiles excluded personal home equity.
I don't know why people are obsessing over the micro details of the definition of HNWI instead of talking about why they have sizable chunks of cash.

Seems a bit like not seeing the forest for the trees, TBH.
My guess is HNWI are more threatened by losses than enticed by gains so the natural behavioral is to accumulate cash when the market looks expensive in hopes of finding gems among the rubble later. After all they can afford to wait.
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ThereAreNoGurus
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Re: Rich people are hoarding cash

Post by ThereAreNoGurus » Tue Jan 14, 2020 8:22 pm

watchnerd wrote:
Tue Jan 14, 2020 8:15 pm
ThereAreNoGurus wrote:
Tue Jan 14, 2020 8:10 pm


LOL... that is an old post. I followed it up by pointing out all of those percentiles excluded personal home equity.
I don't know why people are obsessing over the micro details of the definition of HNWI instead of talking about why they have sizable chunks of cash.

Seems a bit like not seeing the forest for the trees, TBH.
Haha.. I'm inclined to agree with you, but sometimes that's the BH way. :happy

I forgot I had even posted on this thread. Just saw the thread title on top of the active list and went to the last page. Was surprised to see one of my posts being referenced...lol.
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Re: Rich people are hoarding cash

Post by willthrill81 » Tue Jan 14, 2020 8:27 pm

Bluce wrote:
Tue Jan 14, 2020 7:48 pm
willthrill81 wrote:
Tue Jan 14, 2020 7:26 pm
Bluce wrote:
Tue Jan 14, 2020 7:21 pm
abuss368 wrote:
Tue Jan 14, 2020 6:46 pm
I prefer the flexibility of money market and bond funds. Have not owned a CD in over 20 years.
I'm letting my CD ladder run out; there's one left than comes due the end of March and it will go back into bond funds.
Why, out of curiosity?
Because the new ones aren't paying anything. These are all within my SEP; I'm at Schwab (there may be higher ones elsewhere) and the highest one-year available now is 1.75%, the one coming due is 2.5%. I did have a one-year yielding 2.75% but they started declining after that.

Just for kicks, I just averaged my bond fund TTM distribution yields (30-day isn't available for all of them): It is 3.91%.
Gotcha. Makes sense.
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Re: Rich people are hoarding cash

Post by JamalJones » Tue Jan 14, 2020 10:09 pm

retiringwhen wrote:
Tue Sep 10, 2019 3:07 pm
My grandfather (born 1906) always knew that his dog and a .22LR was enough to keep 10 kids fed even if the factory closed or he got fired for helping start a union (that happened twice...)
I would think shooting and eating the dog for a family of 12 would be like one meal. Wouldn’t you need several thousand dogs to sustain the family for an extended time if the factory closed down?
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Re: Rich people are hoarding cash

Post by CyclingDuo » Tue Jan 14, 2020 10:35 pm

JamalJones wrote:
Tue Jan 14, 2020 10:09 pm
retiringwhen wrote:
Tue Sep 10, 2019 3:07 pm
My grandfather (born 1906) always knew that his dog and a .22LR was enough to keep 10 kids fed even if the factory closed or he got fired for helping start a union (that happened twice...)
I would think shooting and eating the dog for a family of 12 would be like one meal. Wouldn’t you need several thousand dogs to sustain the family for an extended time if the factory closed down?
:mrgreen:

Laughing aside, you should try hunting. You can indeed bring home some nice game to eat. I would imagine his grandfather's usual fare with a 22 was rabbit, squirrel and the occasional larger critter.

For those of us who had parents and grandparents that lived through the depression, plenty of stories about eating rabbit and squirrel...

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Re: Rich people are hoarding cash

Post by watchnerd » Tue Jan 14, 2020 11:41 pm

TheTimeLord wrote:
Tue Jan 14, 2020 8:21 pm

My guess is HNWI are more threatened by losses than enticed by gains so the natural behavioral is to accumulate cash when the market looks expensive in hopes of finding gems among the rubble later. After all they can afford to wait.
I would concur.

Less need to take risk means waiting around for something closer to a "sure thing".

At least that's how we manage our working capital cash reserves; our needs are already taken care of by our securities portfolio, so any excess capital is for something with better risk-adjusted returns than what we can get in the public markets.

So we look to private markets for that.
Last edited by watchnerd on Wed Jan 15, 2020 12:39 am, edited 1 time in total.
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watchnerd
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Re: Rich people are hoarding cash

Post by watchnerd » Tue Jan 14, 2020 11:44 pm

CyclingDuo wrote:
Tue Jan 14, 2020 10:35 pm
JamalJones wrote:
Tue Jan 14, 2020 10:09 pm
retiringwhen wrote:
Tue Sep 10, 2019 3:07 pm
My grandfather (born 1906) always knew that his dog and a .22LR was enough to keep 10 kids fed even if the factory closed or he got fired for helping start a union (that happened twice...)
I would think shooting and eating the dog for a family of 12 would be like one meal. Wouldn’t you need several thousand dogs to sustain the family for an extended time if the factory closed down?
:mrgreen:

Laughing aside, you should try hunting. You can indeed bring home some nice game to eat. I would imagine his grandfather's usual fare with a 22 was rabbit, squirrel and the occasional larger critter.

For those of us who had parents and grandparents that lived through the depression, plenty of stories about eating rabbit and squirrel...

CyclingDuo
No tag limit on feral swine when I lived in CA.

Not only are you culling an invasive species that causes habitat destruction, but it's nothing at all like "pork". And healthy, too, given what they eat.
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Financologist
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Re: Rich people are hoarding cash

Post by Financologist » Wed Jan 15, 2020 12:40 am

Rich people are hoarding cash? Really..

They're also hoarding stocks, bonds and Teslas in record quantities.

Check there freezers.. plenty of Haagen Dazs too. They're "hoarding" it.

More interesting... WSJ's December report on the mass exodus of retail investors from equity funds. Gives me faith gains will more than hold in '20.

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Re: Rich people are hoarding cash

Post by watchnerd » Wed Jan 15, 2020 12:50 am

Financologist wrote:
Wed Jan 15, 2020 12:40 am
WSJ's December report on the mass exodus of retail investors from equity funds. Gives me faith gains will more than hold in '20.
Link?

Did they posit a cause?
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Financologist
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Re: Rich people are hoarding cash

Post by Financologist » Wed Jan 15, 2020 12:57 am

Investors Bail on Stock Market Rally, Fleeing Funds at Record Pace - WSJ
https://www.wsj.com/articles/investors- ... 1575801002

Attrubited to trade war and recession concerns.. and not chasing performance.
watchnerd wrote:
Wed Jan 15, 2020 12:50 am
Financologist wrote:
Wed Jan 15, 2020 12:40 am
WSJ's December report on the mass exodus of retail investors from equity funds. Gives me faith gains will more than hold in '20.
Link?

Did they posit a cause?

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JoMoney
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Re: Rich people are hoarding cash

Post by JoMoney » Wed Jan 15, 2020 1:01 am

watchnerd wrote:
Wed Jan 15, 2020 12:50 am
Financologist wrote:
Wed Jan 15, 2020 12:40 am
WSJ's December report on the mass exodus of retail investors from equity funds. Gives me faith gains will more than hold in '20.
Link?

Did they posit a cause?
Maybe https://www.wsj.com/articles/investors- ... 1575801002
http://archive.is/FjKsD
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JamalJones
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Re: Rich people are hoarding cash

Post by JamalJones » Wed Jan 15, 2020 1:18 am

watchnerd wrote:
Tue Jan 14, 2020 11:44 pm
CyclingDuo wrote:
Tue Jan 14, 2020 10:35 pm
JamalJones wrote:
Tue Jan 14, 2020 10:09 pm
retiringwhen wrote:
Tue Sep 10, 2019 3:07 pm
My grandfather (born 1906) always knew that his dog and a .22LR was enough to keep 10 kids fed even if the factory closed or he got fired for helping start a union (that happened twice...)
I would think shooting and eating the dog for a family of 12 would be like one meal. Wouldn’t you need several thousand dogs to sustain the family for an extended time if the factory closed down?
:mrgreen:

Laughing aside, you should try hunting. You can indeed bring home some nice game to eat. I would imagine his grandfather's usual fare with a 22 was rabbit, squirrel and the occasional larger critter.

For those of us who had parents and grandparents that lived through the depression, plenty of stories about eating rabbit and squirrel...

CyclingDuo
No tag limit on feral swine when I lived in CA.

Not only are you culling an invasive species that causes habitat destruction, but it's nothing at all like "pork". And healthy, too, given what they eat.
Haha, fair enough!
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watchnerd
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Re: Rich people are hoarding cash

Post by watchnerd » Wed Jan 15, 2020 1:22 am

JoMoney wrote:
Wed Jan 15, 2020 1:01 am
watchnerd wrote:
Wed Jan 15, 2020 12:50 am
Financologist wrote:
Wed Jan 15, 2020 12:40 am
WSJ's December report on the mass exodus of retail investors from equity funds. Gives me faith gains will more than hold in '20.
Link?

Did they posit a cause?
Maybe https://www.wsj.com/articles/investors- ... 1575801002
http://archive.is/FjKsD
I thought the best answer was in the comments:

Boomers retiring, pulling money out
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willthrill81
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Re: Rich people are hoarding cash

Post by willthrill81 » Wed Jan 15, 2020 1:51 am

CyclingDuo wrote:
Tue Jan 14, 2020 10:35 pm
For those of us who had parents and grandparents that lived through the depression, plenty of stories about eating rabbit and squirrel...
I've had both, and they really are delicious. Not kidding.
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watchnerd
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Re: Rich people are hoarding cash

Post by watchnerd » Wed Jan 15, 2020 2:33 am

willthrill81 wrote:
Wed Jan 15, 2020 1:51 am
CyclingDuo wrote:
Tue Jan 14, 2020 10:35 pm
For those of us who had parents and grandparents that lived through the depression, plenty of stories about eating rabbit and squirrel...
I've had both, and they really are delicious. Not kidding.
Ditto, along with muskrat and turtle. I prefer rabbit amongst the critters.
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CyclingDuo
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Re: Rich people are hoarding cash

Post by CyclingDuo » Wed Jan 15, 2020 7:17 am

willthrill81 wrote:
Wed Jan 15, 2020 1:51 am
CyclingDuo wrote:
Tue Jan 14, 2020 10:35 pm
For those of us who had parents and grandparents that lived through the depression, plenty of stories about eating rabbit and squirrel...
I've had both, and they really are delicious. Not kidding.
We have as well. Taste is actually very similar. Although in our case, no 22 needed. Our dogs catch plenty on their own.

:sharebeer
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firebirdparts
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Re: Rich people are hoarding cash

Post by firebirdparts » Wed Jan 15, 2020 7:24 am

I wonder when the poor will start hoarding cash.
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TheTimeLord
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Re: Rich people are hoarding cash

Post by TheTimeLord » Wed Jan 15, 2020 9:07 am

watchnerd wrote:
Tue Jan 14, 2020 11:41 pm
TheTimeLord wrote:
Tue Jan 14, 2020 8:21 pm

My guess is HNWI are more threatened by losses than enticed by gains so the natural behavioral is to accumulate cash when the market looks expensive in hopes of finding gems among the rubble later. After all they can afford to wait.
I would concur.

Less need to take risk means waiting around for something closer to a "sure thing".

At least that's how we manage our working capital cash reserves; our needs are already taken care of by our securities portfolio, so any excess capital is for something with better risk-adjusted returns than what we can get in the public markets.

So we look to private markets for that.
Ultimate demonstration of this is the cash hoard at Berkshire.

From November 2019
https://www.cnbc.com/2019/11/01/even-ob ... uzzle.html
Warren Buffett’s Berkshire Hathaway has seen its cash and short-term investments rise from roughly $23 billion in 2009 to $128 billion reported in its third-quarter earnings report Saturday morning.
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Re: Rich people are hoarding cash

Post by Sandtrap » Wed Jan 15, 2020 9:14 am

smectym wrote:
Wed Sep 11, 2019 6:54 pm
Another rough-and-ready test for "Am I rich?" is: can you afford to pay cash for a 1700 square foot home in Palo Alto

https://www.zillow.com/homedetails/216- ... 5540_zpid/
Right up there with Hawaii/Honolulu/Oahu.
In some areas, a 3 bdrm 1 bath on 7000 s.f. of land, "fixer upper".
j :happy
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Elysium
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Re: Rich people are hoarding cash

Post by Elysium » Wed Jan 15, 2020 9:24 am

I will hoard cash when I become rich :sharebeer

Since I am not rich yet, I cannot hoard cash :wink:

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TheTimeLord
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Re: Rich people are hoarding cash

Post by TheTimeLord » Wed Jan 15, 2020 9:31 am

Elysium wrote:
Wed Jan 15, 2020 9:24 am
I will hoard cash when I become rich :sharebeer

Since I am not rich yet, I cannot hoard cash :wink:
Exactly. To large degree the size of your portfolio, your goals and your ability to make future contributions drive the amount of risk you take.
Last edited by TheTimeLord on Wed Jan 15, 2020 9:34 am, edited 1 time in total.
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Re: Rich people are hoarding cash

Post by CyclingDuo » Wed Jan 15, 2020 9:32 am

TheTimeLord wrote:
Wed Jan 15, 2020 9:07 am
Ultimate demonstration of this is the cash hoard at Berkshire.

From November 2019
https://www.cnbc.com/2019/11/01/even-ob ... uzzle.html
Warren Buffett’s Berkshire Hathaway has seen its cash and short-term investments rise from roughly $23 billion in 2009 to $128 billion reported in its third-quarter earnings report Saturday morning.
Stock price at lows in 2009: $46 B shares & $73,195 A shares
Stock price at yesterday's closing in 2020: $227 B shares & $340,706 A shares

Cash and short-term investments are not the only thing that have grown at Berkshire. :mrgreen:
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