kvkkc1 - please try to respect my position.
Some folks are looking for considerable payback in the lifetime of an insect. Insect species vary.
I am looking at a moderate payback over the rest of my lifetime, or another 60 years, whichever comes first.
Strange, but the insectoid mind doesn't seem to grasp history longer than a few months. If at all. I am sitting on CSCO equivalents at prices above $70 while you are blabbering about CSCO equivalents maybe getting to $50.
(liquid stocks, cash & cash equivalents are equivalents)
Yes, I enjoyed the run up. Yes I avoided the run down. Yes I am missing some of the run back up. Because it seems to me that there is another leg down that I also want to avoid.
But I win already. And you don't even get it. So don't mock me and my strategy, please.
Why would I risk winning gobs more, when all I need to to do beat you is stay standing still? But I'm not standing still either. I am looking to earn a reasonable return - let's say 6% to give you a head start (my target is more aggressive, but you can smugly label me as a 6% guy if you like). 6% on 73 is $4.30. So if you get a 30% return on your $20 investment, $6.00, you catch up 1.60 of the $53 gap between us. Keep that up for 15-20 years and we'll be even.
Unfortunately, 2005 comes somewhere in the next 15-20 years and growth stocks are more than likely to be less in vogue by then. 2010 makes it a certainty. So the odds of folks finding out that CSCO isn't worth $20 in that timeframe are reasonable too, and with this little demographic secret up my sleeve (figure it out) I am betting the gap never closes.
If you get a 100% return per year, I'll see you in a couple of years. In which time I may just modify my strategy too. I have time on my side.
I think that in this market an intelligent speculator very active in the market could easily outgun me just by trading volatility. But the smart ones would avoid CSCO and stick with the more volatile yo-yo stocks.
But it's not about me winning, or me beating you. It's about me and being able to enjoy my early retirement.
Equities like MO are good places to put money that won't evaporate and still get above mattress rates of return. As measured by money coming into my hands for doing nothing. Equities like CSCO are good places to put money that you don't mind evaporating, in hopes of stellar rates of return when you consciously dispose of the investment later.
Some of us don't need "stellar", and would rather avoid evaporation. It is that simple. Some people can not afford their retirement yet, and must gamble in order to live long and prosper. No harm in going from 1/5 of being able to retire to 1/10 of being able to retire. Particularly if the upside is getting to 2/5 or 4/5 or 5/5. But there's a big difference between going between 1/1 and 1/2. Or, as some of my friends will force down your throat if you'd like, from 2x to 0.5x (ouch).
Finally, since you brought it up, how about that MO. Do I think I'll double my money? The key is "from where". Over the last 50 weeks, MO is up 94%, while CSCO is up -69%. In that light, looks like I'm a heck of a lot closer to doubling with MO than I am with CSCO, huh? 1.94/0.31 = 6x higher relative rate of return on capital. I'll take that.
Closer in? Try the last 100 days or so since you and I have been arguing more vociferously. MO is up 18% while CSCO is down 50%. So please, put a sock in it.
Now, starting from today? I think CSCO has a higher probability of gaining more. I also think it has a higher probability of losing more. It is highly volatile. The time frames in which I act are long, OK, call me lazy, but my analysis is based on these long-acting time frames as well.
Please. Each of us has a style that is appropriate for our time periods. But don't confuse analysis appropriate for long positions with advice for speculators. And vice versa.
John. |
