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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: rushnomore who wrote (25271)	5/24/2000 11:48:00 AM
From: Seeker of Truth	Respond to of 54805

I'm trying to understand what you are saying. If you mean that the long term holder makes this decision every day; I don't think that's the same as a trader who makes different decisions frequently. The same old buy and hold policy each day in the year doesn't add up to 365 decisions. Or does it? Point of fact: the buy and long term hold person spends less time pondering the prices than the trader. Something must be being reduced there; isn't it the amount of decision making?

To: rushnomore who wrote (25271)	5/24/2000 11:49:00 AM
From: tekboy	Read Replies (4) \| Respond to of 54805

<<But every day the LTB&H investor sees his/her strategic decision (to hold) result in either a gain or a loss. And the cumulative effect of those results is what gives the investor his/her long term gain or loss.>> yes and no. obviously yes in a literal sense. but no, because what really gives the Tortoise the long-term gain or loss is not a cumulation of short-term price moves but rather a reasonably efficient market's tendency to eventually bring price generally in line with value. That's why the Tortoise ignores short-term price movements and pays attention only to underlying fundamentals, because those are what drive the long-term movement. I see the Tortoise's strategy not as "buy and make a new decision every day whether to hold or not," but rather, "knowing that I intend to hold for a very long period unless something goes dramatically wrong, what business do I want to become a silent partner in?" This means that the skill set required for Tortoises involves two things: being able to select companies with growth prospects that the market has not already discounted for, and being able to do nothing until/unless fundamentals change. Assuming those don't change quickly, buying and holding is thus one decision. tekboy/Ares@averytryingoneintimeslikethese,ofcourse.org PS Cha2, you're right, some of the newbies might find this of interest... Message 12353501

To: rushnomore who wrote (25271)	5/24/2000 11:53:00 AM
From: Thomas Mercer-Hursh	Respond to of 54805

So I don't think that this holding vs. trading argument can be solved by just multiplying decision probabilities. Not as simple as multiplying decision probabilities, but there is certainly a valid point here. The LTB&H investor makes very few decisions and has the time to research them extensively. Moreover, he or she only has to be right about the trend over a long period of time, not the trend over short periods of time, which is clearly a much less predictable realm. The trader not only has to make lots of decisions with far less time to research, but has to be right about short term movements, so the probability of error is much higher.