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    Originally posted by SimonMac View Post
    Now is a good time to remember that shares are a long term investment
    A long term investment is just a short term investment gone wrong.

    Comment


      In 1988 we made major purchases of Federal Home Loan
      Mortgage Pfd. (“Freddie Mac”) and Coca Cola. We expect to hold
      these securities for a long time. In fact, when we own portions
      of outstanding businesses with outstanding managements, our
      favorite holding period is forever
      . We are just the opposite of
      those who hurry to sell and book profits when companies perform
      well but who tenaciously hang on to businesses that disappoint.
      Peter Lynch aptly likens such behavior to cutting the flowers and
      watering the weeds.
      Buffet again, although of course we know what he did with his holding in Freddie Mac .....
      My subconscious is annoying. It's got a mind of its own.

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        Originally posted by pjclarke View Post
        Buffet again, although of course we know what he did with his holding in Freddie Mac .....
        Is Warren Buffett Giving Up on Stocks? -- The Motley Fool

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          Thanks for that. The answer seems to be 'no'. If I had $30 billion in my back pocket I'd be tempted to purchase a railway or Heinz foods, but for most of us, stocks (or managed funds, I guess) are the only way to own parts of the economy. Just wish I'd a bit more cash in the portfolio, bargains to be had ....
          Last edited by pjclarke; 24 August 2015, 09:33.
          My subconscious is annoying. It's got a mind of its own.

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            Originally posted by pjclarke View Post
            Thanks for that. The answer seems to be 'no'. If I had $30 billion in my back pocket I'd be tempted to purchase a railway or Heinz foods, but for most of us, stocks are the only way to own parts of the economy. Just wish I'd a bit more cash in the portfolio, bargains to be had ....
            The moral of the story seems to be:

            Have money to invest
            Buy during a long period of asset growth, starting at some long term bottom
            Have lots of luck to avoid buying too many duds.

            For example, Lehman Brothers, safe as houses, founded in 1850, look at the stock growth from the early nineties. Fill yer boots! Profitable, growing, what's not to like?

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              Originally posted by DimPrawn View Post
              For example, Lehman Brothers, safe as houses, founded in 1850, look at the stock growth from the early nineties. Fill yer boots! Profitable, growing, what's not to like?
              Hence: Diversification. Minimum 10-15 stocks across many sectors, plus other asset classes. That way for every Lehmans you should have a Coca Cola.

              My subconscious is annoying. It's got a mind of its own.

              Comment


                Originally posted by pjclarke View Post
                Hence: Diversification. Minimum 10-15 stocks across many sectors, plus other asset classes. That way for every Lehmans you should have a Coca Cola.

                https://en.wikipedia.org/wiki/Survivorship_bias

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                  Is it time to buy yet?

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                    Okay, let me go back in time and choose my portfolio. Me vs Buffett, bring it on baby! I will diversify and crush this loser!

                    Here goes, wish me luck!

                    Enron
                    Lehman Brothers
                    Swiss Air
                    Woolworths
                    Polaroid
                    Pan Am
                    Polly Peck
                    Maxwell Communications
                    Ferranti
                    State Bank of Australia
                    Barings Bank
                    Commodore International

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                      Well, quite. Take 1024 monkeys and train them to toss coins. After every toss, any throwing tails are eliminated. By chance one of the monkeys will throw 10 heads and be hailed as the big swinging dick, the master of the universe coin-tosser (or stock picker).

                      But he's still just a monkey. Lehmans and Coke are perhaps opposite extremes and its certainly beyond me to spot which of today's choices are going to thrive or fail. Hence: diversification.
                      My subconscious is annoying. It's got a mind of its own.

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