Albert,
To restate the obvious (ad nauseum), many have made tons of $ by sticking to a longer-term strategy in selected tech stocks such as INTC, MSFT, CSCO, CPQ, HWP, DELL et al.). For you to deny that this is a viable strategy is the shear nonsense. The trick, of course, is in picking the right horses, and watching them closely.
We all know fundamentals can and do change rapidly in the tech sector. Yet I firmly believe that the long-term macro trends in technology remain spectacular. I, like several others, have elected to make longer-term strategic bets on those companies I think will realize above-average earnings growth over the next five-to-ten-to-twenty years. Intel is IMHO one of these -- a choice I know you dispute. Well, that's what makes markets...
I reluctantly sell, and only if I think long-term profit growth expectations have significantly deteriorated. The reason: taxes and the power of compound interest. My deferred tax debit now accounts for almost 18% of total portfolio value. To sell would be to give up a free loan. Check out BRK (if you haven't aready) and realize the power of this formula.
But market conditions change, new technologies emerge, established companies become endangered species if they fall behind. Yeah, yeah, I know. In this sector, that goes without saying. I try not to get too distracted, but keep watching my horses.
I would never deny the validity of a medium- or short-term approach. Many of my closest friends and associates are much more active traders, and the best of them do it spectaculary.
I wish you success in your investments,
John |
