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

To: techreports who wrote (34310)	11/3/2000 9:29:34 PM
From: nosmo_king	Respond to of 54805

>>i've heard people say that if you bought the best stocks at their highs (before a crash) that it would have taken a investor over 6 years or so to get his original investment back? I don't know about buying before "crashes" per se, but a passage from O'Shaughnessy's "How to retire rich" has helped me, a very novice investor, keep cool while my portfolio has been in quite the red territory for most of my investment career (almost exactly one year). He uses an example from Robert Goodman's "Independently Wealthy", which I don't own but find both very interesting and reassuring. "Goodman looks at three people--one lucky enough to always buy at the exact bottom of every year, one whose horrible luck always found him buying at the exact top for the year, and one who always bought on July 1 of each year, regardless of the state of the stock market. Starting in 1960, each invests $3,000. Here's how they would have done by 1996: the first fellow would have a total of $1,569,519-- a compound return of 12.8 percent. The fellow always buying when the market was at a high would have $1,318,300-- a compound return of 12.1 percent. The fellow who never timed the market would have $1,486,037-- a return of 12.6 percent per year!" For me, a powerful example of the magic of compounding and of the long term buy and hold strategy. Combining this lesson, and the lessons I've learned from Geoff Moore and especially this thread, I'm very comfortable in what I believe to be a portfolio of G & K's. (In spite of the overall negative performance to date). Merlin, in particular, has taught me the importance of valuation which I'll use, when more dry powder comes my way. Congratulations, uf, on your accomplishment, and in starting a thread that has helped many. nos

To: techreports who wrote (34310)	11/3/2000 10:09:28 PM
From: chaz	Read Replies (1) \| Respond to of 54805

Sounds great...yet i've heard people say that if you bought the best stocks at their highs (before a crash) that it would have taken a investor over 6 years or so to get his original investment back? Before you agree with that, I'd look at a few charts of those "best stocks", and compare them with our G's & K's. Maybe IBM in '93, if you'd ignored the obvious signals during their previous six months. An investor in Q last January may have a long wait, but I very much doubt it will be anywhere near six years. Chaz