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Tuesday, 24 October 2017

Buy and Hold - Who sold you that idea?

Read? Buy and Hold - Who sold you that idea?

Who sold you that idea?

Hmm ...

Seduced by sexy yield and losing the moral compass!



14 comments:

  1. Uncle8888,

    You forgot to show your chart showing that you have already sold some portions & collected back your capital! Heehee!!

    So it's not buy & hold & forget & regret! :)

    As SMOL will say: You haar!! LOL!!

    ReplyDelete
  2. CW,

    LOL!

    Now we got another Ying/Yang dot that practice Trust but Verify!

    If everyday Sunday, I also will Buy and Hold forever!!!



    ReplyDelete
  3. Hello, SMOL,

    From only HP 73 shares in 1995 it becomes 716.86 shares, now-22 years.

    Beside it gives birth to Agilent, HPE, DXC, KEYS, MFGP,

    And Verigy had been capitalised, and proceeds return to share holders.

    Yes if everyday is Sunday i would have bought 3 times 73 HP shares by 1995.

    i always think if only i had worked in IBM or Usoft then seow liu.

    Boh Bey Chow.

    B & H does work if you can afford it.

    By the way, checking HP's share split history, i notice if i had 73 shares in 1992 or slightly earlier or slightly later, i would be a millionaire by now.

    Don't believe?

    Go and check HP split history.

    i think it should be still around.

    What's the moral of the story?

    Shall i hold forever?

    Go and ask the descendants of the Indian Tribe that sold Manhattan to the White man.

    But in perspective:-

    "It is often said that the Indian who sold Manhattan Island in 1626 for $24 was rooked by the white man. In fact he may have been an extremely sharp salesman. Had he put his $24 away at 6 per cent interest, compounded semi-annually, it would now be worth more than $50 billion, and with it his descendants could buy back much of the now-improved land.

    HA! HA!

    ReplyDelete
    Replies
    1. temperament,

      This 19 year old boy sleepydevil got the essence of Buy and Hold:

      http://singaporemanofleisure.blogspot.sg/2017/10/buy-and-hold-who-sold-you-that-idea.html#comment-form


      For every example you gave, I can equally give you a long list of blue chips nobody thought could fail:

      1. Nokia
      2. Kodak
      3. Blackberry
      4. Bear Stearns
      5. Lehman Brothers
      6. AIG (got bailed out but the shareholders only got 10 cents on the dollar back at most)
      7. Chartered Semiconductor
      8. NOL
      9. Creative
      10. Noble


      Buy and Hold works if we remain alert; not when we fall asleep at the wheel.

      Buy and Forget works if we are depending on Lady Luck ;)


      I do like the AIG example a lot. If AIG can go bankrupt if not for US govt bailout, I better don't believe a word that if I wait long enough, I can breakeven one day... That's not investing; that's hope. And hope is not an investing strategy. In religion, maybe...


      As for your 1626 example, how many S&P 500 companies that were in the index during 1900 that are still listed today?


      For every action, there is an equal and opposite reaction ;)




      Delete
    2. Temperament,

      You were in IT? Lucky you didn't work in Digital Equipment or Silicon Graphics or Novell Networks or Sun Microsystems and got their shares! Kekeke!!

      I remember my time Silicon Graphics & Sun was Da Bomb to work in, besides Microsoft. Pretty sad how many brilliant companies got wiped out in the aftermath of the dot.com bust.

      Amazon & Apple also almost bit the dust. Look where are they now!! Haha!!
      But then horrr .... will need to suffer thru -90% crash in their stock prices during their "pariah years", and anytime could have declared bankrupt.

      Come to think about it .... mostly those IT companies headed by college dropouts or non-techies survived e.g. Microsoft, Amazon, Apple, Oracle...

      Those setup by PhDs, computer scientists, EEE majors, Stanford & MIT nerds almost all died-ed. Hmmm....

      SMOL,

      GM was bankrupted & its shareholders died-ed during GFC --- become Motors Liquidation Company (WTH??). The GM you see today is supposedly a "new" company started in 2009! LOL!!

      Citibank shareholders also suffered in GFC --- from $500 a share to low of $12.50
      And then spent most of the last 9 years around $50 ... now cheonging to $70+ in the late bull phase!! Hohoho!! Huat haar!!

      Or how about Freddie Mac and Fannie Mae??? Both considered quasi-govt organisations --- something like our Temasek-linked companies. Both share prices are still -95% to -97% down from their peaks even after 9 years. Ooo lah lah!!

      Ok ok ... if you own equal portions of the original 12 companies of the DOW in 1896 & forgot about them ... you'd still do quite OK. Only 1 survived as original company -- GE. The rest mostly merged or acquired, some forced to breakup into smaller companies becoz of later anti-monopoly laws, only 1 became bankrupt in the 1950s. Most of the companies still did alright. Hey US was an emerging market then --- plenty of growth potential! Hahaha!!!

      The problem is that a normal human would have gone crazy or died of heart attack seeing all the ups & downs of the stock prices. As Keynes said ... the markets can stay irrational far longer than you can stay solvent!

      Delete
  4. Oh & regarding the 1626 Manhattan, there weren't any lasting "winners". The original whities -- the Dutch -- later exchanged Manhattan island with the British for a couple of tiny Indonesian islands.

    The Dutch thought they could make a killing with a monopoly trade of spices (cloves, cinnamon) unique to those Indo islands. Unknown to them, the Brits had already secretly smuggled the seeds out before exchanging the islands, and planted them in other British territories like Malaya & Sri Lanka. All the Dutch got was insurrection & guerilla war from the natives of the "Dutch East Indies"!!

    As for the Brits?? Well, they enjoyed Manhattan for about 100 years, until something called the American War of Independence kinda spoiled it. Hahaha!!!

    ReplyDelete
    Replies
    1. Spur,

      Thanks for the great GM and Freddie Mac and Fannie Mae examples! That's the equivalent to say if a company is big or temasek-linked it won't fail one ;)

      Oh! Thanks for pointing out my error so gently! Silly me! S&P 500 only started in the late 50s. LOL! I should have said the DOW JONES Index instead...

      We can apply the same Buy and Hold to countries too.

      Of course being Chinese, we can see the rise and fall of our ancestral lands in China. From the Han dynasty's military might, to cultural hegemony during the Tang dynasty, to great leaps in scientific discoveries during the Ming dynasty - to sick man of Asia during the early part of the 20th century... No wonder Xi Jiping wants to make China strong again!

      If I were born a British citizen during the 19th century, the world would be my oyster - the Sun never sets in the British Empire! Two crippling world wars later, Britain lost most of its colonies and is reduced to the sick man of Europe... Only with the arrival of the Iron Lady Margaret Thatcher did Britain rediscovered its mojo. Now with Brexit? Interesting to see what happens next?


      The mere fact we are born here in Singapore is testimony that our ancertors did not practice Buy and Hold, if not we would be born in China ;)


      Delete
  5. Try reading Howark Mark's "Getting Lucky"

    Actually all sorts of trading strategies can make money.

    It is a matter of as long as the cat can catch the mice, why bother it's a black or white cat?

    So i have said before i am a "Rojak Investor".

    Ha. Ha.

    But i believe at the end of the day is Lady Luck or God's blessings, depending on your belief.

    No?

    ReplyDelete
    Replies
    1. temperament,

      I have no proben admitting I prefer luck over smarts.

      But you try telling that to CW!

      See if he will admit his 10 baggers were "luck"?

      If so, what's with the powerpoints?

      LOL!

      Delete
    2. Some are lucky to buy them cheaper; but then became so unlucky to sell them too early. This is how luck factor working in the stock market.

      I was unlucky??? to start serious investing when STI was near its peak on Jan 2000 and then Dotcom bubble burst. If I have started in Jul/Aug 2001; then I will say it loudly and clearly it was damn luck!

      Delete
    3. Heehee Uncle8888!!

      From Jan 2000 till Sep 2001 how much was short-term trading versus long-term investing?? *wink* *wink* :)

      And also ... ahem ahem ... how much percentage of your total cash/CPF was deployed at any point in time during those 21 months? Heheh!!

      Ok ok!! Method! ... Mind! ... Money management!! :)

      Don't hit the face!!! (sorry SMOL ... borrow your words again!!)

      You *DID* achieve FIRE!!!! And that's the important thing!! LOL!!

      Delete
  6. Me loh!

    Always buy too early(kia boh).

    And sell too early (kia sie)

    Both ways also "unlucky"one.

    If not i should have been laughing all the way to the bank.

    ReplyDelete

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