Nvidia at $475 -$515 during the NASDAQ swoon is very interesting idea! Portfolio construction in a time of high valuations

Dow Jones Industrial Average (Down) 31,496.30 - Week ending 03/05/2021 --------------------------------------------- S & P 500 (Down) 3841.94 --------------------------------------------------------------------------------------------------------------------------

Charlie Munger says when Warren Buffett lectures at business schools that he says , "I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had twenty punches, representing all the investments that you were allowed to make in a lifetime. Under those rules, you'd think carefully about what you did , and you'd be forced to load up on what you'd really thought about. So you would do so much better." ------------------------------------------------------------------------------------------------------------------------------------- Well it is my humble opinion that if you followed Warren's advice, that Nvidia, (symbol NVDA), deserves a place as one of those punch card slots if you could get it at a price that was reasonable. Well this past week you could have picked up 5,10,or 15 shares of NVDA at prices between $475 and $515.00 and put in place a building block for constructing a very solid porfolio of stocks. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Here is a great quote from Chuck Akre of Akre Capital Management from the book which I consider the Value investors "Bible", " The Art Of Value Investing" by John Heins and Whitney Tilson. ----------------------------------------------- Chuck says: "A company compounding capital at a way above-average rates when I have great confidence that will continue and the valuation is modest, I want to hold it at a size where it can have a material impact on the portfolio. The rationale is that simple." --------------------------------------------------------------------------------------------------------------------------------------------------------------------Wow! That sentence hit me like a thunderbolt of common sense in investing. -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------------------------------------------- >>>>>>>>>>>>--- Another reason Warren Buffett's 20 number of stocks works so well is because you can try to make sure that no one stock takes more than 5% of your portfolio weighting. It gives you a balancing method by adding or subtracting shares of a stock. Warren himself does this procedure with his Apple shares. Because Apple was buying back their shares, Warren was able to sell some his position off yet maintain an equal or slightly higher % of the outstanding shares of Apple (AAPL). Although Warren has no fear of concentrating a massive position when it is to Berkshire Hathaway's advantage. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ I am a little bit fearful, (my antennas are up!) about an additional 1.9 Trillion dollars in stimulus being added into the mix here. The government will need to carry this either by raising taxes or by issuing a bunch of new treasury bonds. Both Jamie Dimon of JP Morgan Chase and Warren Buffett are telling people not to buy bonds here. What if nobody wants to buy our 10 Year treasury bonds to fund this? This could create a Black Swan event where interest rates on the 10Year bonds have a violent spike up until it finds buyers? That would not be good for many weaker growth stocks, and could drag the whole stock market down. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- We will let Chicken Little "The sky is falling" worry about that one!---------------------------------------------------------------

----------------------------------------------- -------------------------------------------------------------- Have a great week, FREEWILLY --------------------------------------------------------------------------------------------------------------------------------------------------------------------------