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Jun 5, 2021Liked by Eric Bjorndahl

Hmm...I think I know what spawned this thought-provoking post!

Question - if you had held SPY with your cash holdings since you started tracking your performance, would your overall returns be better or worse? If Berkshire historically held SPY with their cash holdings would they have done better or worse? Every day you hold cash instead of a market tracking ETF like SPY you are implicitly betting that the cash will outperform the market. That sounds like market timing to me. Unlike Berkshire, who, given their size, might have a little more difficulty converting ETF holdings into cash to take advantage of great opportunities, and thus puts an option value on cash, you can always easily sell the ETF quickly to invest in a great opportunity if it comes along. Plus I think they would freely admit they are implicitly timing the market. Last, does the fed showing that it is willing to inject liquidity quickly and massively change things?

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