Portfolio positions: I'm re-reading now pages 27ff of Spooner's Do you Want to Make Money or Would You Rather Fool Around?
amazon.com
It's about a one "Your 'Stake in Life' stock". It's about how Spooner (a stockbroker/author) repeatedly hears variations of this story: "I inherited all this Coca Cola stock from my grandfather, and I took it to (financial people ) and they told me I had too much Coca Cola, that I was too concentrated, and that I had to diversify". "Too risky to have all eggs in one basket." "Spread the proceeds over a variety of investments." To which Spooner replies "I say this is bad advice."
This is one of the few writings I've seen where the author it seems to me, argues for a VERY concentrated portfolio. One major stockholding.
Spooner in his younger days, talking with a "financial counselor" who advises Spooner to sell down his (Spooner's) large stake in American Express -- because it was the largest part of his assets, says no, he's sticking with all of his AMEX and might be adding more on dips. Because Spooner believed "...If you don't own your own business, you have to own enough stock in a public company to set you free when, and if, the stock moves up substantially in price. "
His idea: "...to structure the ideal financial life you should identify, as early in working life as possible, one or two companies that you believe in for the future. They should share certain characteristics":
Universal global appeal
Instant name brand recognition
Products or services you "dispassionately believe" will continue to be in demand "for years"
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I mention this because although I'm a believer in diversification, and I'm a VERY big diversifier, gee, I look back at some stocks that seem to meet Spooner's criteria and that I could've bought them 30, 40 or more years ago, and if I just held on, I would've done really satisfactorily at this point in my life. Better than really good if I had reinvested dividends and/or bought dips.
Perhaps it's 20 or 30 or 40 or 50 years too late for me -- time is not my friend now -- I am starting a small tracking position this week in Church&Dwight (CHD). Not a value stock at current p/e. I suspect it could be a stock I might hold though for the remainder of my years. Terrific chart here:
finance.yahoo.com
CHD's products:
churchdwight.com
I suspect if I were younger now, and somebody I respected kicked my butt and said, just buy a few shares and put 'em away, you dummy... I might be very happy in 2022 or 2032 that I listened and did.
Of course, all jmo, nobody's got a crystal ball that works, and I've been wrong many, many times about many, many things. |
