Wild stallions

Hi conifer, all!

I certainly buy into the “pick good companies” mantra, but this sentence stood out:

…With the exception of AMZN ('97 purchase), all of these are less than 5-9 years old…

Take it from an “old-timer” (age 71); everyone is a stock-picking genius in a bull market…and that’s really all we’ve had for the last 9 years.

Not trying to rain on the parade of good thoughts/vibes…but unless it really is different this time, recognize that (as WEB says) you only know who’s swimming naked when the tide goes out. :wink:

Cheers!
Murph
II and PP Home Fool

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<<<Take it from an “old-timer” (age 71); everyone is a stock-picking genius in a bull market…and that’s really all we’ve had for the last 9 years.>>>

And nobody is a stock picking genius during a bear market, and yet most people treat a bull market the same as a bear market. It is like agriculture, you ride the good years and survive the bad.

Great companies, in the end will boom in bulls and not so much in bears, but in the end they come out on top.

Again, with my rules of sale.

Btw/ the rules are not perfect. My rules would have caused me to sell Amazon at some point in the 2000s because it was being disrupted (amazon is Amazon again because of cloud computing - not retail, cloud computing has enabled Amazon to become more dominant again in retail). It is also important to recognize a true bubble. And you are not going to catch every disruption, etc., but that is true with all rules as well. Nothing is perfect, just better.

Between timing in and out of a market, with rules of when to sell, buying and holding quality and just contributing each month, will beat almost any other method of investing through bear and bull. The numbers and market history clearly bear this out as well.

True, this time it might be different, who knows. The world will end someday, Rome will fall to barbarians some day (I’m sure Rome never saw that coming, despite probably predictions of such things for hundreds of years, until it finally did happen, the British Empire will never fall…)

Tinker

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TMFMurph and all,

Yes, I do get that. But, it’s less of a bull market issue and more of a timing issue. A few points… 2009 was the buying opportunity of a lifetime with the Dow sitting below 7000, if an investor had cash, which I did. It was not easy to step up and buy during a very fearful time. Many investors did not, including the MF service I subscribed to from '07 to '12. Like deer in headlights.

Most of my companies were purchased initially in 2009 and added to with more time. Building long term positions in good to very good companies, I was buying companies, not stocks.

Also, many investors would have sold long ago, happy with a 75% gain in a year or two, for example. Not selling has been the key to my investing success since the early 90’s. It takes a certain mindset, no doubt, as best I can tell.

Do note the list is hardly one of small speculative companies and includes several good dividend payers (my returns includes divs. I realized after posting results that I made a mistake not including divs for UNH and WM. With divs, UNH is a return of 1002% and WM is 270%. I reinvest divs, so it shows the power of compounding and long term investing.

Bottom line is I had cash in early 2009 and I invested it over time with confidence because I was thinking 10 years out. And maybe most importantly, I did not sell, even though I was told to sell by the service!! I’m retired now because of this and the approach has changed because I live off the accounts (one taxable and two IRAs). Cash management 101.

conifer

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Thank you to everyone who contributed to this thread.

My take away - I don’t know the companies I own we’ll enough. Perhaps to be more precise, I don’t know ALL of the companies I own well enough. In some cases I’ve ventured too far from my high conviction positions. This leads to considering what amounts to market timing.

Interesting since I’ve only ever sold one of the positions I started - Infinera about two years ago.

Time to study and trim I think. Clearly not comfortable with some of my positions.

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1) Don’t sell based on valuation. Trim if you have to, but don’t completely resize a position simply because you think it’s “expensive.”

2) Seek quality: there’s no safety in “value” (as I attempted to point out with BBBY).

Bear

Actually, these two points contradict advise prescribed by investment greats like Ben Graham (The Intelligent Investor), Warren Buffett, Peter Lynch, et. al.

You may want to take a look at the research done by O’Shaughnessy (What Works of Wall Street), his extensive analysis of over 50 years of market data very clearly demonstrates that “value” strategies outperform and produce the best long-term success. He also clearly illustrates that in bubble markets we often see investors pronounce the death of the value strategies and the dawn of a new era, only to see investors taken on a wild gut wrenching ride followed by catastrophic losses. That is perhaps what you may be experiencing with SHOP and BBBY.

Contrary to your point about “no safety in value”, my experience has taught me the opposite. In fact, value is what ultimately brings the high-flying Wall Street darlings crashing back down to earth. Anyone who was actively investing in stocks from 1997 to 2002, or 2006 to 2009, knows this all too well.

History proves that the stock market always reverts to the mean. It’s impossible to predict when, but every bull market ultimately peaks in a bubble, and then the fun begins.

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Invest wisely my friends

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Take it from an “old-timer” (age 71); everyone is a stock-picking genius in a bull market…and that’s really all we’ve had for the last 9 years.

I love this point, it is so true and so important. When your only experience is formed in the rising tide of one of the longest bull markets in history, one can easily be fooled into thinking they are great stock pickers. In the bubble years of 1997-2000, any half-brained idea was bound to work… pick stocks with a ticker symbol that starts with a vowel… it works for a while, until it doesn’t.

Surviving in the long-term involves managing risk, which we often overlook in good times, until it is too late.

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Invest wisely my friends

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