SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Value Investing
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Boyd Hinds who wrote (13899)2/12/2002 12:22:06 AM
From: Don Earl  Read Replies (1) of 78672
 
I wouldn't bet the farm on that study. Using indexes such as the S&P 500 is pretty much useless. The only thing you can be sure of is the 500 stocks in the index in 1926 is NOT the same 500 stocks in the index today. A more interesting study would be to go back 20-30 years and see how many of the companies in the small vs. large are still in business. My guess is the portfolio would consist of Dow 30 stocks because all the rest of the stocks had been canceled. Delete ENE & KM from the index and move up the two highest market caps from the mid cap index.

IMO, any portfolio intended to be held for that length of time has to be based on the potential of the company to still be in business after that length of time. The indexes don't take a loss when one stock is dropped and another added, individual investors do. Assuming a 30 year time frame is targeting retirement, the only possible strategy I can think of that would make sense is to put the money in a mutual fund based on the Dow. The chances of IBM being around in 30 years strikes me as being a lot better than the chances of Brand X still being able to carve out their $100 million a year niche market.

Personally, I'm rather fond of small caps, but I wouldn't dream of owning one for 30 years.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News