OT--The Decline of Long-Term Investing

I found this chart and the accompanying article interesting especially since I remain a long-term investor, even at 70 years old:


It seems many of us (not me) no longer have the patience for long-term investing,
and seek the holy grail of the big score in the quickest time possible?



David, life moves fast. Can you imagine we are able to produce a vaccine for the pandemic in 9 months? Now companies, are getting to Trillion $$$ valuation in very short time. Facebook 18, googl3 23, Amazon 27 they are global, trillion $$$ companies, and Facebook, is worried about its future and has already started re-inventing itself in META.

How many of us here worked in a single company and retired/ retiring? And how many expects that for our children?

Interesting article and thoughts. I agree that businesses and companies are changing (and need to change) faster than ever. It’s certainly very dependent upon the industry as clearly anything technology is faster because basic technologies change faster. Cell phones came on the scene and dominated in a decade. Cloud companies came on the scene and are taking over from in house systems. I don’t think that will change or even slow down (probably continue to speed up?).

But I believe the basic premise of the article is wrong. Yes, statistically the average holding period has reduced. No doubt about that. But why? I don’t think there are any less buy and holders. In fact there is a strong argument there are more. If you look at Vanguards SP500 index fund it has grown tremendously over the last few decades and doesn’t show any sign of slowing down. This is the ultimate buy and hold. It is the average investor (and 401K contributor) saying that they can’t pick stocks better than buying the whole market. And for the most part that is good, I believe.

But what has happened is the proliferation of these hedge funds and high speed trading companies that are added on top and they trade thousands of times faster. Think of it this way. Over time, you have the same and growing amount of people investing, either buying individual stocks for the long run or buying index funds. They trade thousands of shares a day. But with the advent of High Speed Trading and hedge funds like that, they trade millions of shares a day. So now you average the two and the holding period drops dramatically, yet there are more LTBH investors than ever.

Now should we allow these front running high speed traders? I say no. But that would be another post/different topic.

Who is a long term buy and holder for the most part although I do tend to trade around the edges of my portfolio constantly.


Thanks, Kingran and Randy, for your thoughtful replies.