All the stocks that I hold have been bought with at least a 10-year outlook, if not longer. I wouldn't worry if any of them stayed flat or even went down a bit over a year or two.
Good point about the ten year outlook:
Here's a chart for the last 100 months comparing your favorite stock MO (Phillip Morris) versus the company, whose long-term outlook you repeatedly question--LSI
techstocks.com
Looks to me that a stock like MO returned just an anemic 5% a year--the same 5% return that you were making fun of to Addi.
LSI by contrast returned a spectacular 30% a year, which compounded produced a return of 900% over the last eight and one half years. Now that's investing. And what is your strategy? Disinvest in the company that has had superior returns and invest in the company that has inferior returns. That makes no sense at all. Moreover, as you (and everyone else) observe, LSI is in a cyclical business, but the point is that it is not in a cyclical business where one peak is equal to the next peak. To the contrary, the peaks are so much greater over time, and that is why LSI is such a superb investment for the long-term investor. Indeed, one must look at the performance of LSI over one full cycle and compare it to MO to see which is the superior performer.
Yeah, I know the blather about MO's dividends. But dividends are the ultimate form of short-term capital gains, since they are taxable as income. I'm sorry, but I just don't see the sense of your strategy as a growth strategy. |
