Written by Summary
Burned by the recent market turmoil? Head hurts from thinking about single-stock ideas too much? Wondering about whether to buy value or growth now?
Sometimes there’s a moment in the market to not over-think it.
One of the best risk-adjusted ideas we can think of at present is to buy the S&P 500 – in its SPY ETF form – and then to go play golf.
In addition, the aptly-named SPY has the rare quality of giving you a little glimpse into the future – you can use this to think about growth vs. value too.
We explain all below. Read on!
This idea was discussed in more depth with members of my private investing community, Growth Investor Pro. Learn More »
Investing Be Like This … On Opposite Day. DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note’s date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications. Peering Through The Kaleidoscope
First up, don’t worry, we aren’t going to bother telling you about SPY ‘s holdings or weightings because (1) you know that already and (2) you can read that in a thousand other places. If you do want to explore the underlying positions, you could start with the Seeking Alpha page covering the instrument ( here ). We also aren’t going to talk about management fees on the fund because, really, who cares? They’re low. Move on.
So, with that done, let’s set a little context here first, since the whole world and their dog writes about SPY and we would like you to actually read this note, as common a topic as SPY apparently is. Once you’ve read it you can decide whether to lob rocks at it, throw it in the trash, or think about it and use it in your own work. You know best. It’s your money we’re talking about here.
Here at Cestrian we run an independent investment research shop. The raison d’etre of outfits like ours is usually some kind of derriere-intelligente edge on single stock names or investing methods or whatnot. If you run a research shop you generally don’t want to be saying, go buy the S&P 500 folks, because, really, the office dogs around here can work that one out. (They’re German Shepherds. They’re pretty smart.) So nobody is going to give you money for saying it.
Unless, that is, you can figure out when to buy it and when to sell it and why and get that right a few times.
And if you can figure out how to use SPY as a signpost for how to play growth vs value? That can be useful too.
We’ll come back to that stuff.
There’s a reason why the Master, one Mr. W. Buffett, promotes the same old line these last hundred years about what the regular retail investor should do – which is to say, go find a low-cost passive S&P 500 tracker and put your money to work in that, feed it extra money when you have it, get on with your life, and then when it’s time to hang up the laptop, hand in the catered avo lunch ticket, go play Metaverse golf all day, pausing only to WhatsApp your robo-broker and cash in your tidy pile of Corporate American gains. Over most any say five year period of time, this is an excellent strategy. Literally nobody got poorer owning SPY for long enough unless they needed the money during the fallow years.
However. Even though it’s the totally obvious long-term investor play for people who […]
Written by Summary