First off, my view of professionals in the stock market field is not very high, influenced by personal experience as a customer, by personal experience as a broker, and by "The Motley Fool" which pretty well codified all that experience into one telling volume.
I feel, also from personal experience, that an investor who pays attention to what he'd doing will beat the professional most of the time. It's a bit like the DYI market. Most homeowners who learn how to do a thing will do it better than any hired contractor.
Second, it depends on where you take the 30% hit. If you're in Dell, up 114% so far, a 30% cut puts you back to +49%. If you're in QCOM, up roughly 400%, you're still fat.
Tell me truthfully. If you had $1,000,000...would you be really fearful of putting all of it into MSFT today? Well, maybe you're not following the company, so that may be an unfair question to you. For me, MSFT's future is beginning to look bigger than it's past...it's future earnings possibilities are getting larger, not smaller. MSFT is thinking far beyond the desktop, which makes it a screaming buy IMO. It may not do 50% a year, but it will come darn close on average.
Yes, hindsight is easier. That's why you need to learn where and how to look, and what to look for to find those 50 per centers.
No, I'm not suggesting just one stock. If you look at the portfolios I've mentioned, there are 33 companies between the two. The G&K is up 30% for the year, so there are a couple of laggers in there. The W&W is up 135%, so there are some big gainers. As I've said, once you know where to look, you'll find them.
But these guys get knocked down as well. The difference is that in most cases, it's the market doing the knocking, so they come bouncing right back up. So if you see it coming and get out, that's luck. If you ride it through, that's because you have confidence in what lies beneath the daily volatility.
I had IOM for a while, and got scared out of it in a fall, just before it popped back to 6X my purchase price. I lost about 30% on that, because I was watching the market, not the company. Really dumb, not to watch both.
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