Mark Cuban on CNBC says that he agrees with cohodk.

jmski52

Well, maybe he didn't mention Dave by name but he did say that he is heavy into cash and really, really, really doesn't trust the stock market. The reason he gave for this distrust is that the hedge funds are using the stock market as a platform to "hack" themselves profits.

Besides being the billionaire owner of the Dallas Mavs, I had to look him up on Wikipedia just to remember what he's notable for. He got his money via software companies the old-fashioned capitalist way. I suppose he knows what he's talking about when it comes to using software to skim the stock market. I'm not necessarily an admirerer, but he does support two online financial sites that I thought were interesting - one to track the 2008 stimulus money (Bailoutsleuth.com), and one "to uncover fraud and misinformation in publicly-traded companies" (sharesleuth.com).

He's been around the block with numerous companies in different industries - pretty much the consumate capitalist. During his talk, Jim Cramer sat silent, and when Melissa asked him about holding so much cash when it's not making any interest, he shot that bs down saying that he really thinks there are hazards in the stock market, saying "when you have a few billion, how much more money do you really need?"

And Baley, this is a guy who knows stock ownership and company ownership. He knows how to survive financially by putting capital to work, and he's not comfortable in stocks, now. I'm just sayin'.

cohodk

Cohodk wishes he had just 1% of Mark Cuban's money.

I dont think he is calling for the end of the world, but rather that great opportunities will come and its prudent to be prepared. Maintaining a position of liquidity is a great way to take advantage of those opportunities. And to that I do agree 100%.

I agree there are hazards in the SM, just as I believe there are hazards with all asset classes, PMs included.

DrBuster

Cuban does know what he's doing. It was fun watching him make his rags2riches money back in the 90s while I was establishing a web-based consulting/IT career instead of chasing start up monies and technology development for a quick hit like he did....silly silly stupid me.

gsa1fan

"when you have a few billion, how much more money do you really need?"

This says it all!

Baley

I agree with both of them, and you too jmski. I don't trust "stocks" or "real estate" or "commodities" or "collectibles" or "cash" as aggregate asset classes, as all have relative strengths and weaknesses at different points in market cycles. Sure, stocks "averages" can and do decline over periods of time, as to all asset classes.

I do hold specific investments in each of those asset classes though, and am very comfortable with a balanced approach. I hold cash reserves but not to excess.

I use the relative performance of each investment, along with news flow to form opinions about specific securities, to rebalance the portfolio now and then.

I try to buy high quality assets, and will take a big position in the right opportunity, whether it be a rental house, silver bars, draped bust half dollars, or shares in a company.

I find it a little surprising that all that "cash" on the sidelines can't find productive use. Actually it's not all that surprising, the world is perceived as a very risky place

I blame the media

derryb

<< <i>Besides being the billionaire owner of the Dallas Mavs, I had to look him up on Wikipedia just to remember what he's notable for. He got his money via software companies the old-fashioned capitalist way. I suppose he knows what he's talking about when it comes to using software to skim the stock market. I'm not necessarily an admirerer, but he does support two online financial sites that I thought were interesting - one to track the 2008 stimulus money (Bailoutsleuth.com), and one "to uncover fraud and misinformation in publicly-traded companies" (sharesleuth.com). >>



He also wisely invested in Turtle's tequilla escapade and made a bundle. He likes to argue with NBA officials and is considered an "embarrasement" by old money NBA owners. Owns HDNet cable television that brought Dan Rather back to the screen.

JimDepot

"He also wisely invested in Turtle's tequilla escapade and made a bundle. He likes to argue with NBA officials and is considered an "embarrasement" by old money NBA owners. Owns HDNet cable television that brought Dan Rather back to the screen. "


Wait till the old money MLB owners deal with him.
They will make a bundle just like the NBA owners did.
I wish he would buy the Reds, but I could become a Dodgers fan.

I have been taking money out of my IRA every year (last 3 years) to buy pm's while contributing to my 401k to get the match.
I don't trust them either.

Spooly

It's safe to buy into the stock market...... I just shorted the market. That means the market will surge 500 points and gap over my stops! (frown)


(Edited for spelling error)

AuAgPt

<< <i>he did say that he is heavy into cash >>



Hmmmm....Did he say how his cash position is beating inflation? Inflation hungrily eats cash in this market. Do any of you seriously believe our real inflation rate is 3.8%? What's a 30-yr CD paying, 1% maybe? Beyond having some for liquidity/safety reasons, cash is a loosing proposition right now until interest rates climb significantly. --aap

piecesofme

Cuban has been heavy into cash for quite some time and has made this same point known for just as long. Not really news.
Now Warren Buffet saying today that he (his company) has quietly aquired a little over 5% of IBM without them even knowing it is news

jmski52

Hmmmm....Did he say how his cash position is beating inflation? Inflation hungrily eats cash in this market.

He didn't make that claim. If I properly interpreted what he said, he is more willing to sit on cash and take those consequences than he is willing to risk it in the markets against the high-frequency traders, whom he refers to as "software hackers" because no software program is perfect enough to resist the onslaught that high frequency trading presents, and that it is used to influence the market in one direction and then to take profits before the other market participants can react. Frankly, I think he has a point.

Do any of you seriously believe our real inflation rate is 3.8%?

No, and that's one of the reasons that I'm not 50% in cash. That's one reason that I'm over 80% in metals, including my home equity. I've taken a high risk position in metals now for several years, and it's paid off. At least I haven't leveraged it. I'm willing to take such a position because I don't see a better alternative, even including so called "diversified portfolios". You make different assumptions, no matter what you invest in. My assumptions mostly point toward a lack of trust in the markets and government the way that they are being managed at this time.

As far as Warren Buffet is concerned, he is lookin' out for Warren Buffet and he talks his own book.

mariner67

<< <i>"when you have a few billion, how much more money do you really need?"

This says it all! >>



Yeah, once you've won the game you don't have to play it anymore!

ksammut

<< <i>

<< <i>he did say that he is heavy into cash >>



Hmmmm....Did he say how his cash position is beating inflation? Inflation hungrily eats cash in this market. Do any of you seriously believe our real inflation rate is 3.8%? What's a 30-yr CD paying, 1% maybe? Beyond having some for liquidity/safety reasons, cash is a loosing proposition right now until interest rates climb significantly. --aap >>



Even if he stays out of the market for a year or two, inflation will not hurt him or any of us that are mostly in cash especially if we are right that we can see world markets drop 20 to 40%. I'd rather be in cash to take advantage of the collapse I am expecting. He may be doing the same thing.

1/3 in PMs for me and the rest of my liquid holdings in cash.

calleocho

When you have a few Billions i am pretty sure you get a much better rate than 1%

Justacommeman

<< <i>

<< <i>he did say that he is heavy into cash >>



Hmmmm....Did he say how his cash position is beating inflation? Inflation hungrily eats cash in this market. Do any of you seriously believe our real inflation rate is 3.8%? What's a 30-yr CD paying, 1% maybe? Beyond having some for liquidity/safety reasons, cash is a loosing proposition right now until interest rates climb significantly. --aap >>



Liquidity is very underrated and not terribly sexy. However, with patience it often unlocks value and better opportunties. You may lose some short term yield in the process but if you make the "right" buy you can achieve much better net returns. I parked some converted Canadian dollars a couple months ago in a 8 month CD with a APR of 1.25%. I was puzzled at the time on what to do with the US dollars. Still am.

I learned a log time ago not to make not to get caught up in the inflation game. It often leads to bad decisions. At least that's my take.

MJ

yellowkid

Where is a retired person who lives on his portfolio to go? Buy all PM's and hope that things go to hell? I've always been diversified and I probably will continue to do so. A good deal of my "paper" is now (actually has been the last year or so) in dividend producing companies.. Liquidity is overated, keep a few years cash around and don't worry about it.

streeter

When Mr. Cuban is talking in public about his asset allocation being heavily in dry powder, he is actually asking for deals to be brought to him. Can you imagine the phone calls he gets??????
He likes to play the game..it's addictive and he isn't the type of person to go sit on an island and drink Mai Tais.

You make your money when you buy...he knows it and he's in one heck of a position. This economy is going to suck the liquidity out of a lot of people( & companys) in the next 5+ years and he'll sit tight until it does. His only problem is making sure that his 2billion doesn't degrade to 1.8billion purchasing power next year. Two billion and the ability to close in 30 days. WOW.

It's a problem I'd like to have.