The Valuation : Value Investing Through Valuation

Cash is not just “what’s left over”

Among stock investors, cash is often seen as nothing more than “spare funds” or “what remains uninvested.”

It’s the most overlooked component of a portfolio—often misunderstood as a passive, idle asset.

But in truth, few assets hold more strategic value than cash.

It is not simply a standby resource; it is the only asset that can be exchanged for any stock.

And when the market hits a crisis, cash becomes the most powerful tool in an investor’s arsenal.

Cash is the most flexible weapon an investor has.

1. Cash is a risk-free call option

There’s a reason I refer to cash as a “stock” in your portfolio.

Cash holds a stable price, but its potential return fluctuates with market conditions.

In other words, holding cash gives you a built-in option to act when the time is right.

Is the market overheated? → You can wait. Has the market plunged and undervalued stocks appeared? → You can act immediately.

That optionality creates massive long-term advantages.

2. Cash shines in times of crisis

When markets are booming, everyone is an investor.

But when fear takes over and volatility reigns, real skill is revealed.

And in those moments, only those holding cash can move.

During the early pandemic in 2020,

The 2008 global financial crisis,

And even through today’s high-interest, high-volatility environment—

Cash holders always found opportunities,

While overexposed investors deepened their losses.

Cash is not just a “safe asset.”

It’s your ticket to re-enter the market quickly when prices recover.

That’s when cash reveals its true value.

3. “100% invested” isn’t bold—it’s reckless

Some investors pride themselves on being “fully invested at all times” or “buying whenever they have money.”

While that may seem aggressive, it often reflects a lack of risk management.

When all your capital is tied up,

You’re unable to act or make decisions when real opportunities arise.

These investors are often forced to sell at a loss just to raise cash during downturns—

One of the most damaging behaviors in a bear market.

Instead, maintaining a regular cash allocation and adjusting your positions with flexibility

Is a far better strategy for sustainable returns.

You should buy stocks when opportunity arises, not just because you happen to have money.

Cash determines your investment rhythm

The market never stops moving. But investors don’t need to chase every move.

What matters more is being ready to move when it counts.

And cash is what makes that readiness possible.

Cash is not “idle money.”

It’s capital reserved for the moments that matter most.

From now on, treat cash strategically.

It is your edge when the market breaks down,

And your safety net for long-term returns.

Remember:

Cash is a position, too.