When I was a little kid and lived in a small village, one of my activities to pass time was looking for low hanging fruits from mango, rose apples, guava and ciku trees around my house. As this was the easiest way to get these fruits, I had to compete with my other cousins as they could also get them easily. So, usually these low hanging fruits were all gone before they were ripe. Hence, I would start to look for fruits higher up and may need to climb the tree or using long stick to pluck them.
I like to compare that activity with my stock investing - do I still find low hanging fruit easily today? I dont think so and I felt most fruits are now hanging at the tip of the tree instead. It is getting more and more risky to pluck those fruits and to get them at that height, I may misstep and fall down to the ground and hurt my self badly. Somehow, I start to remind myself, if there are not many fruits low hanging or within reasonable reach, I better take a break and wait for new fruits to grow at a range within my safe reach.
With US stocks at all time high and a rich valuation, I better trim my exposure and for sectors I have under-invested earlier, I am not taking excessive risk to chase them. I am afraid of height even during my childhood, so I better remind myself this height in stock can be very damaging.
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