I saw this article referenced on another thread. Here's a perspective of someone who bought MSFT more than 10 years ago. MSFT is a few light years ahead of ANCR today, but it makes me wonder what is the best strategy for our fair-haired stock.
Message 10340946
"17-June 1999: His stock now is worth $1.2 million.
At the same time, had Mr. Housel held on to all his Microsoft shares --instead of giving some to relatives, using others to finance a vacation cabin, and selling still more when he feared they had risen too far -- the value now would be about $3.8 million."
<snip>
"People are risk-averse," says Prof. Robert Bontempo, a social psychologist who teaches at Columbia University's business school in New York. "I challenge you to find me more than a small handful of people who can watch the stock appreciate that much and not take the profit."
<snip>
"But he held on to Microsoft, even as it lost a third of its value.
Why? Partly it was just good luck. 'It wasn't that significant to me yet,' he says; his attentions were focused on his other holdings then. 'It didn't represent half my net worth, as it does now. '"
<snip>
"For the next several years, Mr. Housel managed to sit tight, thanks to the advice of his stockbroker. The two men became friends, and whenever Mr. Housel felt panicky, he would have lunch or dinner with the Seattle broker, Bill Donnelly of Smith Barney, now the Salomon Smith Barney Holdings Inc. unit of Citigroup Inc.
"I'm going to sell all that stuff tomorrow. Why be greedy?" Mr. Housel recalls thinking repeatedly. "What do you think, Bill?" he would ask. Mr. Donnelly would shoot back, "Hang in there.""
<snip>
"and instead of focusing on his stock gains, he reminds himself of his mistakes in selling when he should have hung on. And there is part of him that doesn't quite believe the whole thing has happened.
"It's scary," says Mr. Housel, who finds himself worrying whether he should lighten up even further on the stock. "You can't feel that you deserve this money. It started out as a small percentage of my portfolio, and now it is the monster that ate the whole thing."
I am sure there are plenty of counter-examples where people have ridden it up and ridden in down and kick themselves for not having the brains to sell before it all evaporated. It could be worse, I suppose, like last September/October or for the Powerball winner today. Good luck to everyone on their decision.
Greg |
