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

To: Investor2 who wrote (3398)	3/1/1998 10:59:00 PM
From: Paul Senior	Read Replies (3) \| Respond to of 78525

Investor2: I just wish I knew! My preference is to sell at fair or full value (whatever that is -g- sometimes I have lots of trouble figuring it out). But my latest tally of my performance is that of the last 22 times I've done this (sold), the stocks have continued to rise (18 times). So now I have 2 risks against me. That (selling too soon) and risk of reinvesting proceeds in a wrong stock. But on the other hand...some stocks I still seem to be holding forever. Very hard for me to do this as they go higher and higher. Pharmaceuticals for example. Very hard even to assess fair value. Now they're way past the point - the ruling reason - why I bought them. Yet fortunes have been made JUST HOLDing them. (The old lady in NYC who died last year w/$24 million comes to mind.) Just holding TIGHT ---Ridiculous maybe but there we are - I'm in and glad I'm in. I compromise a little by selling some small amounts on scale up - lose more by doing this than I make by reinvesting proceeds in undervalued stocks it seems (I'm laughing and crying here.) Another method discussed on this thread was one of O'Shaughnessy's several methods wherein he has done research which indicates if - once per year you rebalance your portfolio by closing positions and then buy stocks that have risen the most the previous year which have certain qualities like psr below 1.5, etc. ---- this is a very good way to invest (There's a thread on SI.) Not sure that I've got his requirements exactly right here -- his is not a method I'm comfortable with. Hard for me to step up and buy up. One thing I can say is that I believe my portfolio turnover is a heck of lot less than most of the other guys on this thread. I don't believe in pig-at-trough investing AT ALL. (Which is, if you find a new stock you like, you kick out a stock you already have--only so much room at the trough -g-). I don't know how guys like Honest Abe can hold on so long to such a few stocks -- they are tough in the good Buffett way -- too tough for me. o52870u2--oops that was my cat climbing on the keyboard... Okay, enough of this screed. Read this article out of today's Washington Post. Very good regarding buy and hold and staying in the market. Obviously I like it -g-. What're your ideas on all this? Paul Senior washingtonpost.com

To: Investor2 who wrote (3398)	3/2/1998 9:25:00 AM
From: Honest Abe	Respond to of 78525

I2 - I have to empathize with Paul's statements. I have sold stocks in the past in which I felt the 'story' deteriorated. I have only sold one stock because it had become 'overvalued'. That was Microsoft at 88 with a 90% profit. What a huge mistake. On the other hand, I have held TXN from 9/13/96 ($23.5 split adjusted) up to $71.25 around 10/97 (+203%) down to around 42 in 12/97 (-41% from high, +79% from purchase) and back to 58 today (+147%). So, sure I have had a 41% pullback at one point, but even at that low I was up 79% in 15 months. I would be interested to see how many people who had been in and out of TXN made 147% in the last 17-18 months. The two other things I like to take into account, in defense of buy and hold, are the positive tax implications as well as buy and hold's track record - Buffett is the most successful, documented investor ever, and he is buy and hold. Why argue with that?