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To: John Koligman who wrote (41683)	2/9/2009 7:43:51 AM
From: Pam	4 Recommendations Read Replies (1) \| Respond to of 60323

Here's the deal on buy and hold for the past decade as compared to the decade after the '29 crash and the 'stagflationary' '70's... My comments were in reference to Art's long-term B&H strategy, which obviously hasn't worked over the last decade unless you timed it perfectly and bought your stock at the lowest prices since the company went public!! I did not suggest that there is no money to be made in SNDK if one buys at current prices. Even though the recent low has been 5.xx, one can buy stock at 8.xx or 11.xx and there will be a time in the future where you should be able to make money, just as one could have made money in the last decade selling at 50's or 60's or 70's, but it ain't gonna happen with just a B&H strategy! One will have to sell the stock when one is making money! This is a stock where the underlying product is a commodity and it will have its cycles. You just can't do B&H with this one.

To: John Koligman who wrote (41683)	2/9/2009 12:34:19 PM
From: Art Bechhoefer	Respond to of 60323

John, regarding the strategy of buy and hold in the article you posted: Many thanks for what is probably one of the best arguments for NOT investing in a basket of stocks, such as the S&P 500. The article confirms what Warren Buffett, among others, has been saying for decades. If you confine your investment strategy to buying an index, then your results will approximate that index over time. If the index is broadly based, such as the S&P 500, your results will approximate the overall performance of the stock market. Warren Buffett does not believe in that strategy, needless to say, and neither do I. What I do agree on, however, is that a long term buy and hold strategy for an index type basket of stocks is not a way to maximize return on investment. If you were going to confine yourself to an index strategy, then you would also have to do some trading to avoid catastrophes such as we have experienced during the last year. On the other hand, if you directed your investments toward well managed companies with higher than average potential growth or with proprietary technology that kept them ahead of the pack, you might outperform the market. Those who believe in the so-called "efficient" market theory will say no, no, you'll never do better than the market, so you might as well buy the market. The problem with the efficient market theorists is that their data is flawed. And also their notion that, because of the "free market," the price of a stock contains all the information you need to know. After the last year, this theory should have been laid to rest, but evidently there are many who still believe in it. What I believe in is the IMPERFECT MARKET, which is to say that not all of the necessary ingredients of the free market are present. Under these circumstances, an individual can, with a bit of study of individual companies, do better than the market in general by focusing on better managed companies with better than average potential growth and enough uniqueness to keep them a cut ahead of the competition. Art