I think: mayyyybe this can be rectified. I have learned to be patient.
This reminds me of a Morgan Housel Fool article, The Agony of High Returns https://www.fool.com/investing/general/2016/02/09/the-agony-…
Even with a time machine, a lot of people wouldn’t want to own the best-performing stocks.
What was the best performing stock over the 20 years from 1995 to 2015? Bet you can’t guess.
It was Monster Beverage. A astounding 105,000% increase. $10K became more than $10 million in 20 years.
The truth is that Monster has been a gut-wrenching nightmare to own over the last 20 years.
It traded below its previous all-time high on 94% of days during that period. On average, its stock was 26% below its high of the previous two years. It suffered four separate drops of 50% or more. It lost more than two-thirds of its value twice, and more than three-quarters once.
The article goes on to quote Charlie Munger: … if you’re not willing to react with equanimity to a market price decline of 50% two or three times a century you’re not fit to be a common shareholder, and you deserve the mediocre result you’re going to get compared to the people who can be more philosophical about these market fluctuations.
My point in bringing this up isn’t to say who is right and who is wrong, that’s not the way to look at it, I think. What I see is that there are different investing philosophies, and to be successful you have to choose a philosophy that resonates with you and which you can almost instinctively master and support. Saul bails at signs of serious business troubles, moving into other companies that are just starting their big growth times. Other people do the LTBH thing on companies that go through problems and emerge better & stronger. Neither strategy is “better” than the other, but successful as Saul and Housel and Munger, etc. are with their strategies, I think they would fail if they tried to adopt the other’s approach. Munger would probably fail chasing growth just as Saul would probably fail just buying and holding for very long periods of time.
And, that’s something I keep in mind as I read this board. I know I’m not as agile as Saul, nor as patient as some others. For every LTBH like NetFlix, there’s probably a dozen companies Motley Fool has recommended to hold, or even worse, buy more, during business problems, whose stock price never recovered. Multiple re-recommendations for DDD, FEYE, and SWIR, for instance - all down a lot compared to the S&P 500.
If I try to chase growth, I won’t be as good as Saul - probably a lot worse. Similarly, if I try to invest in beat up companies, I won’t be as good as Tom E. And if I try to find the 10+ year LTBH companies, I’m sure I’d chose the equivalent of Pets.com instead of Amazon.com (yes, back in the day that was actually a hotly debated choice). So, what I do is read and learn and see what resonates with me. Those are the ones I latch on to, because I can execute those at least somewhat instinctively.
I remember reading an interview with Gregory Peck a long time ago. He was starring in a movie (Arabesque) in a part that was originally written for Cary Grant. Both were great actors, but Peck was struggled in this movie. He kept complaining to the director that the part wasn’t written for him and his style, and he wouldn’t be able to pull it off. It’s not a great movie as a result. The point here is that I believe you have to find what suits you and do that. Don’t try to be something you’re not. Learn from others, absolutely, but also understand what fits you.