Barton Biggs wrote columns to allow for people to help understand how he was seeing the world. For many years he was connected with Morgan Stanley helping to run its research, investment management division and the firm; later he left to manage his families money and others in a hedge fund. His columns from 2010 to 2012 were put together in the book Diary of a Hedgehog, John Wiley & Sons, 2012.

After you accumulated a number of stocks, you worry about asset allocation. Is it the right mix? the correct diversification allowing the markets to go which way they will and for you to continue to make money. Jack Bogle of Vanguard said, “Asset allocation should be based not on choosing the right mix, but on the consequences of choosing the wrong allocation.” Mr. Biggs agreed with him.

Mr. Biggs writes if the valuations of your portfolio has shrunk, and if you are convinced the fundamentals of your investment thesis are still intact (why you bought the things you own), why should you be bullied by temporary falling prices? Mr. Market is a manic depressive with huge mood swings, and you should bet against him, not with him, particularly when he is raving. In an ideal world, when the market is deeply distressed and offers to sell his share of the business at a huge discount, that is a buying opportunity. When share prices are high and the market wants to buy an exorbitant premiums you should sell.

In investing, everyone has perfect vision looking back to history and can wonder why you either did something or did not do something. It is the normal course of events – we all have a tendency to fight the last war. The moral of the story is to know thyself and know thy foibles. Study the history of your emotions and actions. At the extreme moments of fear and greed, the power of the daily price momentum and the mood and passions of the crowd are tremendously important psychological influences on you. It takes a strong, self-confident emotionally mature person to stand firm against disdain, mockery, and repudiation when the market itself seems to be absolutely confirming you are both mad and wrong. Ensure you are obsessive in making sure your facts are right and you have not missed or misunderstood something. One method to do this is keep an investment diary of your actions and emotions and have the occasion to re-read it from time to time particularly when there is extreme panic.

The other part of life is to ensure you do something you enjoy on a regular basis to keep balance In your life. For panics eventually do pass.

Linking to dividend paying stocks, all stock prices go up and down, that is a given. If you have well capitalized stocks that have paid a dividend and increased it over the years, then the affects of the market going up and down is lessened. The dividend greatly enhances your return as well as good profitable stocks will increase in value over time.

There are more questions than answers, till the next time – to raising questions