Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 260.77

+0.2%

Dec 24 12:59 PM EST

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To: Robert O who wrote (62748)	4/7/2002 1:41:30 AM
From: FR1	Read Replies (1) of 70976

only suckers hold long oblivious to obvious boom/bust cycles. I'm not so sure I agree with that. More correctly you could say that at the bottom of a crashed market (thanks AG) a lot of people scream about how LTBH doesn't work. Look at WMT, HD and C. siliconinvestor.com If you held them for the last 8 years you would have a little over 31%/year return on your money. Not bad compared to 1.5% savings rate. You could add AMAT to that chart and get the same result. IMHO, What you can say is that every now and then the FED decides, usually just for academic reasons, that it is time to choke the economy. They do it and it kills all the high growth businesses because the high growth businesses, almost by definition, were out there building and growing like crazy. When you cut off their capital you kill all their zillions of half done projects and leave them up to their eyeballs in debt (it was the telecom sector this time around). So you get a big fall for them and it takes a few years for us to rebuild what the FEDs burnt to the ground. This does not affect the blue chip moderate growth stocks. So the moral of the story is to always have a good chunk of moderate growth blue chips on hand and never sell. With the high growth stocks you should buy as we start to recover and hold until the FED (none of whom have ever run a business) decide the stars tell them it is a good time to choke the economy off again. Then you sell all high growth. Even that phase usually lasts 4 or more years. This last one was from 92 through 99. I think it is mostly the talking heads on tv who, at the top of the market, are saying LTBH has always been the way to go and at the bottom of the market are saying LTBH has never worked.

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