I've been going through my portfolios to categorize stocks I own by length of time I've held them. Stocks held for 5 or more years, 8 or more years, 10 or more years. I'd like to show that these stocks are profitable investments, and that those profits were obtained over the course of several years. It's because I get tired of so many trading threads on SI and because I see the lack of patience people everywhere seem to have with the stocks they buy. Even value investors. (And I'm not immune either.)
Going through my files, it seems I'm in the black on every stock I've held for five years or more. But I have to give up. I'm not so sure that these stocks are profitable for me when I take account of the time value of money. Some of these stocks have had years when they've had no price appreciation. (Some though have paid dividends which I might consider as an offset.) Some have cratered, and even though I'm price-wise ahead, I should've (ah hindsight) sold at much higher prices when I had the chance. (e.g. Sun Microsystems).
Also, I see now there's a bias problem, in that the loser stocks I bought, I likely have taken my losses on and sold. So the point I would've liked to make, - profit not by trading but by holding on to stocks for long term gains - is diluted or obviated by the fact I likely got rid of losers somewhere along the line (maybe after several years).
Was it Gilda Radner who used to say, "Nevermind"?
-g-
Paul Senior |
