Share Investment, Discussion & Tips

[DimPrawn]

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.

[pjclarke]

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 .....

[DimPrawn]

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

[pjclarke]

Is Warren Buffett Giving Up on Stocks? -- The Motley Fool

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 ....

[DimPrawn]

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?

[pjclarke]

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.

[DimPrawn]

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

[administrator]

Is it time to buy yet?

[DimPrawn]

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

[pjclarke]

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

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.