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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era
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To: Axel Gunderson who wrote (595)8/6/1998 7:18:00 PM
From: Freedom Fighter  Read Replies (2) of 1722
 
Axel,

I enjoyed your insights into the Nifty Fifty. I especially enjoyed the reference to the big declines that occurred at various points that made the original purchases seem rather silly for very long stretches. I am not sure how to quantify the risks of a market decline even when a stock ultimately justifies it original purchase price. It just seems that waiting until the next "New ERA" shows up 30 years later makes little sense from a practical point of view. We might be dead. I also know this. I would rather have purchased KO or any of the others in 73-74, the early 80's or October of 87 than in 1972 or now. That is where the big money was made. Parking one's money in cash or bonds when stocks are extraordinarily high, optimism abounds, expected returns are not much higher than alternatives or even when you just can't find any great ideas has been a great strategy historically. Fear, greed, the average, and the unexpected still play as much or more of a part as the short term fundamentals. The worst returns have come when the entry point was the best of times and the best returns have come when the entry point was the worst of times over ten year intervals. 10 years seems like a long enough period on which to view one's results but no so long that it misses great opportunities in between. It is also practical for real life.

"When others are greedy, I grow fearful. When others are fearful, I grow greedy" GREED RULES as I write!

Wayne Crimi
Value Investor Workshop
members.aol.com
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