Behind the Balance Sheet #17 The Writer - Vitaliy Katsenelson on Investing, Life Philosophy & a Scarcity Mindset
11 snips
Dec 15, 2022 AI Snips
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Build Portfolios Case By Case Not By Template
- Customize client portfolios rather than clone a model: pick between 'active value' or 'dividend' strategies, apply client restrictions, and only buy stocks still undervalued.
- New accounts look different because positions bought earlier may no longer be inexpensive for newcomers, so cash levels and holdings vary.
Why 60:40 Could Fail In Rising Rate Regimes
- Vitaliy believes the traditional 60:40 stocks-to-bonds allocation is a legacy of falling interest rates and may not work when rates stop declining.
- He recommends a barbell approach: hold 5 years' living expenses in short Treasuries for stability and invest the rest in undervalued individual stocks.
Valuations Drive Future Decade Returns More Than Growth
- High starting valuations compress future returns because mean reversion in price/earnings subtracts from earnings growth.
- In a likely low real-growth, inflationary decade, stock-picking becomes essential to preserve wealth.