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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Thomas Mercer-Hursh who wrote (54501)10/29/2003 3:33:42 PM
From: Stock Farmer  Read Replies (2) of 54805
 
I think that many of us are willing to let go of those WhatIf gains because we know that we can't time the market. If I could consistently get end-to-end gains equivalent to 20% per year, I wouldn't care if I missed out on some 100% or better spurts, should I have known the future in advance. One is achievable; the other isn't.

Hi Thomas, there's no need to time the market.

When we enter a position, we have a target rate of return for our investment. What's wrong with selling the investment (or a fraction of it) when it has met or exceeded our target return?

I'm just a simple farm boy, but if I was raising hogs that suddenly matured overnight, I might think twice about feeding 'em and cleaning the pen for the rest of the summer just 'cause that's what my pa taught me to do.

I might just send 'em off to the processing plant early. Objective achieved.

Let's say you would be happy with an investment with 10 year return of 20% per year. Let's say you joined the glorious QCOM pile-on and bought in at $20 a share. Well, if we neglect the complexities of taxes, you could have locked in that 20%/year 10 year return by selling a few months later on the way up for $75 and putting the proceeds in a T-bill.

Or could have sold a few months after that for $80 on the way down.

The folks who didn't guarantee for themselves a 10 year return of 20% per year... well the opportunity was there for the taking. Twice.

Nothing to do with timing. Everything to do with keeping sight of investment objectives.
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