| | Ben Graham gave what many consider to be the classic definition of "investing." He said (roughly) that an investment is any operation which, by means of thorough analysis, promises security of invested principal plus a favorable return on investment." Everything else he dismisses as "speculation."
That definition certainly leaves a great deal of room as to what constitutes "thorough analysis," and Graham et. al. wrote the classic references to explain their view of it. Some agree, some don't. But at a minimum this would seem to require an informed, rational, systematic, and continuing appraisal of the fundamentals of the business, relative to its stock price.
To "buy and hold without much thought of ever selling" would hardly qualify as "investing" in my view, since it would require no informed judgement after the intial purchase.
But that doesn't necessarily exclude buy-and-hold from being a reasonable investment tool either. Its a lot less difficult to be right on the bigger issues like identifying the best companies than it is predicting the short term (6 month?) moves of the market, no? Business cycles not withstanding, buy-and-holders of AMAT haven't done so badly over the last few years have they? I suspect they'll continue to do well over the next few years as well. |
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