Sorry Ralph, we obviously aren't going to agree, but can't you see how
emotional you've gotten over all of this? Can't you see that it's that same emotionalism that is clouding your view of the issues?
You say unless I honed in on his winners, my gains are less than an index fund. I say that's not true. Hulbert is only measuring all of the stocks JD tracks, not when I bought and sold them. I don't follow lockstep in JD's path, because there isn't one. You have to create your portfolio on your own, and as such there are infinite varieties in the makeups of portfolios that result. In fact, JD has stated just that (at length) a number of times, such as in both the April and October 1997 issues of IW.
I completely get it about Cendant... what you refuse to admit is that if JD recommends a stock at $24, it drops to $7, then bounces to $48, he does indeed get credit (assuming he is still recommending it at $7). The only way this wouldn't be the case is if he didn't mention the stock while it was down. That isn't the case, so he gets the credit. For every "little" investor who bought in at $24, there's one like me who hasn't, and can now buy in at $7, or conversely average down... I'm amazed that you seem unable to figure this out...
You need to stop manufacturing arguments Ralph. I'll grant you that the rationale for him promoting the WSW portfolio at the end of the year has a good deal of self promotion wrapped in it... and I can't say I'm surprised he doesn't mention it when it's down... Who likes to air their dirty laundry, or proclaim their failures??? But, the WSW portfolio isn't a part of JD's investing discipline. It's a product of the show, that JD participates in, despite the contrivances of being unable to buy except on one particular day, and sell 1 year later. I quote, from page 9 of the January 1997 issue:
"Note: Please do not rush out and buy all 10 of these stocks at any price. Buy LOW; wait for the right price."
Plus, he hardly RAVES about it.. at most, it gets one or two lines in small print somewhere in the 8 to 12 pages of the newsletter once every 3 months... and that's when he's doing well!!! He gives it a good bit of press (maybe a whole page) when he makes his selections for the year, and that is typically it. I'd hardly call that raving.
Do I need him to account for every day, trade, buy, sell, and percentage on a monthly basis? Heck no! If I don't have the ability to track the winners and losers of the stocks I'm interested in, I should be ashamed. I'd much rather JD spent his precious space on commentary than accounting.
How dare you tell me how I should be interpreting what JD says! Since when did you get the authority to tell me what is the proper way to "understand" something. That is the most ludicrous statement you've made to date, and really makes me question your ability to deal with this issue logically.
Well, a third hand account on what JD said about Novartis on a phone message and his supposed neglect of a brokerage downgrade... well... I'm sold... what was that number to cancel? You MUST be making this stuff up, that or you've got a PhD in pretzel logic...
I personally think you're way off base regarding JD's honesty and integrity. You've said a couple times that he never admits to his mistakes... but that's a blatant lie. Just as one prime example, the October 1997 issue of IW, page 8, I quote:
"Naturally I will make some "mistakes" - buying companies where the business turns sour and the stock goes down. Sometimes the setbacks are temporary. Sometimes they will depress a stock for years. In spite of diligently following our companies, I don't always get it right. But please don't let my relatively few mistakes bother you too much.
Every once in a while, a mistake turns into a major winner. I recommended Bally Entertainment at $12 in 1993. But it fell to $3 or $4 about a year later. That could have been described as a BIG mistake, but only if I had sold it! In fact, it was a major opportunity to accumulate lots more Bally shares, cheap, before their merger with Hilton (the combined shares are now worth about $36 each).
Mistakes are part of the business. Losses don't always turn into profits later on. You and I are allowed to make some mistakes. We only have to be right 60% of the time to achieve our profit goals, and I believe we are right far more often than that.
Life, business and the world are in constant flux. No one can see the future. What looks like a great opportunity can turn into stale money, or a loss. When you understand these truths about how profits are made by individual investors, you will not fall prey to the psychological demons that haunt most individuals. It is senseless to blame yourself when a company with excellent management runs into an earnings setback. That is simply a part of the story of making money as an investor. Together, we'll accept our mistakes and still profit."
I think that, along with the multiple concessions on the lackluster performance of MONFA, SME, CSRE and others just shows how foolish it is to say he doesn't admit to his losses.
DWB |
