My dear OJ
Let me first echo the thoughts expressed by others on this and the options thread; you are really a delight to know and your infectious optimism is a joy to behold.
>>First of all, i just turned 57 last week..
Many belated happy returns -- there is a link, somewhere on the Web, which takes into account ones age today and various risk factors and then tells you based on all of this what your likely life expectancy is -- mine came out to something like 87!!
>>Yes I'm a Taurean
And I am a Capriconian but various people who have played a significant and positive part in my life are/have been Taureans.
>>I have ALWAYS been an optimist...my glass has always been 1/2 full, never half empty....I've been that way for all my life...<<
It does not surprise me one bit to hear that. I am very much the same way--I never cease to be amazed at how good life has been to me. Not so long ago, someone close to me--who I have known many years-- asked me what was the happiest time of my life-- he was surprised when I said it was "right now". That was two years ago and if I were asked the same question, I would respond the very same way--"right now"!!
>>As of this very moment in time, i have been reflecting on this market and it's incredible potential...I was wondering if everyone within earshot could recollect the last 10 years, and where they would be today IF they bought and held thru all the dips, crashes, corrections & bear markets etc...<<
I have reflected on the very same things; there are stocks that I owned and sold in the mid 80s that have done incredibly well. Many are names that you will probably never have heard of -- so I do understand your point. Some of my best performers today are stocks that I bought and have held on to for years.
>>What I'm saying is this...For ALL of us, no matter what your age, trading style, or investment strategy, it has NEVER been more evident than right NOW, to BUY & HOLD FOR THE LONG TERM..Eliminate the fear & greed & noise, and invest for the future...It's never too late....don't think YOU'VE missed the run...because this run is only just the "Begining" of a bright future just ahead for us all...<<
And on this we part company to some extent--- I don't entirely agree with you!! But then, I never agree with you on everything:)
Let me say that for someone who has 30-40 years of earning potential, what you say is probably true. For those with a shorter time-frame I suspect that it is not. It is one of the great fallacies to believe that a buy and hold strategy always works. There have been studies done which have shown that depending on when one bought, it may have paid off handsomely -- or it may not have.
For example, for one who bought at the top of the market in 1929, it would have taken decades to break-even. For one who bought when the DOW crossed the 1000 mark for the first time, it took years to make a decent return given the subsequent decline. If one had bought the Nikeii at its top or close to the top, one would still be down by substantially over 50% at this time--after almost a decade. So there is a great danger in citing, these heady times as a reason to buy and hold for everyone.
Now all of my examples are in the context of the market averages and I am fully cognizant, that some stocks have done a lot better -- just as some have done a lot worse.
I think that we are in a very over-valued market by most conventional measures. Now that is not to say that it may not get even more over-valued -- but that is hardly a basis for investing in this market. IMO, at the moment we are operating on the greater fool theory.
>>Using the market to build wealth makes the most sense to me of anything else I can think of...Buy the Big Cap quality stocks, do it often, and never look back...<<
Again with a long enough time frame -- you may be right. But I have been around long enough to know that these things go through cycles. There was a time when people said the same thing about real-estate. In the mid-70s, during the oil crisis, the conventional wisdom was that oil would be at $100 per barrel within a few years. In the late 80s the conventional wisdom in California was that real estate could never do anything but go up. Well the people who bought when the market peaked in 1990, have still not seen prices back to where they were -- 8 years later. Gold was at close to $1000 in 1979 -- never saw that level ever again since then. Today it is just above $300. Nothing lasts for ever, when it comes to investments!!!
>>Take a portion of your cash and trade it for fun & excitement & profit, but make it a small portion..The Lion's share should be investment money that will explode along with this powerful money makin' machine...<<
Here, I do agree with you--but I think the time to INVEST, is when no one wants to own a sector/equities.
I am more in cash today then I have ever been in years and years. In fact, later this year, one of my largest positions, will be substantially in cash because the company is being acquired. At that point I suspect that I will be about 70% in cash, 20% in equities and 20% in bonds.
Do I feel bothered when I am sitting on all of this cash and the market heads ever higher--sure I am, at some level. But what I do know is that preservation of capital way more important than capital appreciation -- as someone so aptly put it, else where on SI.
>On a rainy Sunday here in the East, i leave you & all with this thought...
On a beautiful day here in Southern California, I leave you with these contrary thoughts:)
>>Right now I believe the "INTERNET" will be the way of the future to make incredible profits...Everyone should own AOL, YHOO, LCOS etc...The staggering numbers that will be coming aboard this Fast Moving Explosive Sector will shock and surprise even the most conservative investor.... I feel the even though PE's are so out of whack, they will eventually catch up, and then surpass all estimates ...The Internet's Commerce will be so amazing and powerful, we will all look back on these stocks a few years from now and think how cheap they were...<<
I think that the internet has promise -- how much remains to be seen. But right now this is the most over-valued sector and in the case of some of the internet companies, the valuations are not justified in this life-time or the hereafter. I will take a friendly wager with you that a year from now the stocks that you have cited above will be well below where they are today.
However, agree or disagree --my best regards to you as always
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