Here's an interview with Mark Cuban, the billionaire owner of the Dallas Mavericks.
http://online.wsj.com/video/cuban-on-inv...mpvidcar_2
In it, he says if John and Sally only have $50,000, the first thing they ought to do is pay off credit card debt.
After that, use the transactional value of cash -- stock up on toothpaste at a good price, etc.
He doesn't believe in buy and hold because of how the market works now. Says it works for Warren Buffet, but not average investors, because Warren has $3 billion to invest in companies he believes are undervalued (which gives him control).
He keeps his money in cash so he sleeps better at night. He waits for times like the past week that are volatile -- "the world series of investing" to use his cash.
Says the current bubble in the tech sector is among venture capitalists who invest in name companies because it looks good in their portfolio. Then the next group of venture capitalists comes in...says it's like a ponzi scheme, with each group laddering their way in and paying off the previous investors.
Talks about the need for patent reform because patent litigation is hurting the economy and costing us jobs. The litigation culture is entirely different now compared to the 80s. (used Microsoft as an example and how it wouldn't exist today). Everybody and their brother is buying patents and using them to sue.
This is true. I've been hearing more about it lately. Apple just paid $4.5 billion for a patent collection as a defensive measure. I believe Google recently spent a billion or more as well. He pointed out that was money that could have been used for more productive things. Patent litigation is also expensive to defend in court
