There’s a time and place to be aggressively long. And there’s a time and place to let the markets play themselves out after a huge run.

Over the last few years, the markets have, despite most professional money managers fighting it every step of the way, been on fire.

Do you recall back in 2009 when the corporate economy was just emerging from the debt crisis and crash of 2008 with trillions of dollars of welfare, targeted tax cuts, stimulus and bailouts?

It was hard to look past the bust and crash and foresee that all those trillions of dollars funneled towards giant corporations along with a policy of zero interest rates would work to create a new stock market bubble. Even harder was betting that the smartphone/tablet and app revolutions would indeed become their own trillion dollar economies when the common refrain from consumers back then was “I just want a cell phone that doesn’t drop calls.”

Even harder was sticking with your conviction about that coming bubble and staying long and buying common stock and even call options when the markets would subsequently crash every time the debt markets burped over the subsequent years.

It’s tempting to get greedy right now. You see the markets are up huge for the year already and are at all-time highs and you see them going up again this week and you feel like you’re not invested in enough stocks right now. But the time to buy was when others were scared and prices were crashed. How many times have I talked to you guys about making the “hardest” trade because it’s usually the right one to make? Right now it’s hard to be patient and to not be greedy.

If we expect that the markets will bubble even more from here, and moreover if we believe that most of the stocks we’ve invested in are going to grow no matter what happens over the next few decades with the Republican/Democrat Regime, the Fed, housing, taxation and fiscal policies and so on, then we’re probably positioned just about perfect for now. We’ve trimmed back some of our longs, added some short hedges and are not trying to get a bunch of near-term gains from gambling on earnings reports.

I get asked all the time what would I do if I were just starting to invest/trade right now? Which stock would I buy and how much of each of them?

You want to always allow yourself at least a few months to get fully invested. So start slowly.

And because the markets are already at all-time highs and are already up huge for the year, you’ll want to start even slower than usual. Put about 1/5 instead of the usual 1/3 that I was preaching when the markets weren’t at all-time highs and prices were lower in a basket of at least a dozen stocks, betting about twice as much on your favorite stocks in that basket as your lower-rated stocks in that basket.

And even if the markets finally do crack for a little while and the markets’ year-to-date gains are erased, you still will want to go slow at first. I have seen the markets and my own stocks go up huge to start off the arbitrary calendar year.

Back in 2003, I was up 30% by the end of January. I sold a bunch of my stocks down and locked in about half of those profits. By the time the markets had corrected and pulled back in March, I was only up about 15%. I started buying more common and as the stock prices kept crashing, I kept scaling into more. But I got too aggressive and eventually I’d given back all my gains for the year and then some as the markets really tanked into the summer and didn’t quite recover into year-end. By the time I’d closed my hedge fund in late 2007, I’d made my investors a bunch of money and that 2003 ride was but a distant memory for them. But I still have the scars and the lessons I learned from that experience are certainly applicable to this market this year.

Be patient while others are greedy. And keep the steady-as-she-goes approach of investing in revolutionary companies and using the ups and downs of the markets to your advantage.