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Private Business

An experiment of InternetU.org's Business School

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Current Investment Stategy

Prior to 1998, our general philosophy had been to "buy and hold" securities as part of a diversified investment portfolio. The second largest portion of our portfolio had been in equities (the stock market).

Our general philosophy remains the same; however, the short term outlook requires special readiness. After having accumulated stocks over the last 20 years, participants in this experiment began re-aligning their portfolios between August of 1998 and August of 1999.

Over the period, the average yield on the stock portfolios was in excess of 70%. For this, we are grateful. Unfortunately, our confidence in such extraordinary gains faded.

By August 16, 1999 we had liquidated 75% of our equity positions and hedged another 15%. (That means we sold options that are called coverd calls. Selling these options helps to protect our wealth.) We anticipate less than 10% of our diversified investment portfolio will be in the stock market by years' end... and, perhaps as little as 2%.

Our largest position will likely remain in real estate. But, most of our semi-liquid assets (like stocks) will be converted to liquid assets. Some of the proceeds from the sale of the stocks will also be used to purchase other real assets, such as, gold, treasury issues and commodities.

If you would like to learn more about these ideas, please stay tuned.

Please click here to learn some of the theory behind what we do.




Class Project:
What would happen if any of the following were to occur?

EXTRA CREDIT
If more more than one of these events happened at the same time, what might the chaotic system look like?

More Things To Think About

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Y2K Myths

A Hedged Contrarian Position






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