A Fool and His Money

My investment record is littered with emotional decisions and bad choices. But once in a while, just as in golf, I make a good shot and continue to delude myself into thinking that maybe, just maybe, I’ve got some talent and that the future will be better than the past.

One of my successes has been to invest in overseas mutual funds a few years ago. They’ve been generating spectacular returns (over 20% per year). Not only have foreign company stocks been performing well when viewed against their home currencies, the returns have been turbocharged because those currencies have strengthened dramatically against the dollar.

But I sense the dollar has moved too far down, too fast, especially against the euro. So on November 20th, I shaved my foreign holdings in favor of good old American stocks and bonds.

Last February I wrote:

Stock market bottoms are reached when years of decline, interrupted by dead-cat bounces that raise false hopes, cause even the most optimistic bulls finally to throw in the towel. When everyone wants out, that’s the time to get in. If it were a stock, it would be time to buy Iraq.

That call was a little early, but I’m getting the same vibe about the dollar.