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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (42044)	3/29/2011 10:48:41 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78481

Did she ever buy a PALM or Motorola? ;)

To: Madharry who wrote (42044)	3/30/2011 12:29:58 AM
From: Spekulatius	2 Recommendations Read Replies (1) \| Respond to of 78481

All these stories of people who just did the buy and hold thing with one stock suffer from survivorship bias. We here the stories from the winners but not from the loosers that held on stock that did not do too well or went to zero. I work for a company with a very volatile stock but it was mostly down since 2002 - the stock lost 95%+ of it's peak value since Y2000. A lot of people were betting on it - some got out close to the top but most rode it all the way down and didn't retire and kept working many years longer than they thought they would. Those starting at a pharma company in the 90's propbably thought they were set for life - great benefits, great business with 20% net profit margin, growing 15%+ year. You get a good salary ESPP and stock options on top and keep it rolling. Most stocks like PFE, MRK and many others are ~50% of their value in 2000/2001. Many of these aspiring armchair millionaires probably got laid off. the index tells a truer story, They are flat for 10 years, so on average people did not get rich. If they constantly put funds in to their 401k they bought a lot at the top during the last decade. Many folks had to take serious salary cuts in the last great recession, 401k matches were cut, bonus payments cut, furloughs, 10% pay cuts etc., so I do not think that the law of averaging work too well when contributions are by design procyclical. Even worse, I do not think that the outlook for the next 10 years is much better than for the last 10 ones, due to Bernankes clownbuck policy. I say stay nimble and look out for opportunities as they arise and keep a bunch of cash (or quasy cash or at least a bond fund) waiting for the fat pitches that come along.I expect a crappy but unefficient market going forward and I think the nimble strategy will work.

To: Madharry who wrote (42044)	3/30/2011 12:46:36 AM
From: Paul Senior	Read Replies (2) \| Respond to of 78481

What's your wife buying now or next, Madharry? Inquiring minds want to know.

To: Madharry who wrote (42044)	3/30/2011 1:02:37 AM
From: Paul Senior	Read Replies (3) \| Respond to of 78481

There are two things going on here, imo, Madharry. There's me and my liking of CVX, and my experience with employees who've bought and held this stock. There's my acquaintance who never worked at CVX, but bought and held that stock as a major part of her investment portfolio. Fair enough to say there's plenty of risk with working for a company and making its stock a significant holding. And also, fair enough to say there's survivorship bias with looking at this as a investment method. I point out though, this acquaintance, using only her limited academic skills and limited funds, but looking around at investment possibilities, found CVX and invested in it and held on to it. (Aside: self-taught, she can talk bonds/annuities/stocks/real estate.) It seems to me what she's done is the exact Buffet espoused way. What stocks have you guys found that you have been holding for ten or twenty years or more?