Hold forever is the way to go. You don’t care if it falls off the cliff because in the end it will bounce back much higher than before (for example, what happened in 2001 and 2008).
I understand this well known concept and often wins. I have this confidence, hold forever, with real estate, but not in stock market. Hopefully, one day, I may follow this in stock too.
It takes even more determination and nerves of steel to do so with both stocks and real estate. But then the reward will be twice as sweet
With the right stock, can hold through great recession.
AAPL recovered spectacularly. Nearly 40 times of Dec 1999’s peak.
MSFT climbed above Dec 1999 high recently.
YHOO has yet to recover to Dec 1999 high.
Some completely disappear.
Have to be very confident that yours is the right stock with due diligence, and most importantly, some luck.
This is the issue with stocks, really scary. Like buffet, we need to find right stocks to hold on.
But, all my real estate so far dipped on my profit for very brief period of time 2008-2010. Even then, it dropped almost 10% during that time, but when recovered went up almost double in value !
With rapid advancement of technology, automation and globalization, all businesses are not guaranteed to last long including those enablers, and the long held “sure win long term” stocks like consumer staples and utilities. So, there are no stocks qualified as buy and hold forever, the only buy and hold forever “stock” is the index fund on S&P 500 (top 500 US businesses at any time, which changes often).
How about holding on to the hottest silicon valley stocks instead of S&P? I think that’s a better bet. Right now that would be AAPL, GOOG, FB, NFLX, and TSLA.
IMO, These are the stocks we can confidently hold. If any big fall 5% or more on these stocks happen, as long as economy is good, we can keep adding it. Tesla alone we need to be careful as it is volatile always. BTW: I own all except TSLA (why? Missed the boat !)
Watch out two more: 1) UBNT (fallen well) 2) NVDA (falling) both are falling after the results.
I don’t have to do anything with index on S&P, now you want me to actively managed? For index on S&P, I leverage on all those professionals without paying a cent and now you want me to work like a resource person struggling to make a few cents? From an investor to a worker bee!!! You’re not thinking like an investor.
For wuqijun and any1 who understand Mandarin,
I want to be an 资本家/投资人, don’t want to stuck as a 资源者.
Different styles of investor. Like Ben Graham said and Warren Buffett always says, how active/passive you are should depend on how much work you are willing to put in. If you know the in and out of Apple and Facebook for example, you can be an active investor in them.
If you choose to not do any work though, by definition you have to go passive and buy whole market index fund.
You miss my point… read my response to wuqujin again.
Tesla stock has increased 55% in the last 2 months.
The automaker announced Monday that its first official venture in the Middle East will be in the United Arab Emirates. The first cars – the Model S and Model X – will hit the road this summer. “Timing seems to be good to really make a significant debut in this region starting in Dubai,” Tesla (TSLA) CEO Elon Musk said at the World Government Summit in Dubai.
I don’t understand Tesla. So I am avoiding it.
These are the stocks to buy when the market is down IMO, if everybody thinks they are hot I stay away.
I think I disagree with your article’s distinction. The SoftBank guy’s model is the same as Warren Buffett. He “allocates capital” in a few, large investments. He’s an investor. No need to make up another fancy word for what’s doing. The only difference between them and us is of course they can influence the companies they bought or invested in. We small fries can’t.
Many times your comment make me wonder
My point to wuqijin on S&P 500 index vs the basket of 5 is:
a. I’m investing in the best 500 US businesses, not the entire market nor a concentrated basket of 5.
b. I’m leveraging on professionals to do the work for me. And I pay peanuts for their service.
c. Actively managing the basket of 5 need time and resource, and possibly switching in and out, may be replacing them if need be. No difference from working. It is essentially a resource person’s job.
When you overthink, you would realize everybody and every job has an investing, managing and specialist component… if you overthink, you miss the point. The point is try to move the mix to investing, use leveraging.
Yes, It is volatile and crazy. Better to invest where we are comfortable.
TSLA, NFLX and AMZN are similar model, they are volatile, profits are put back into company growth (how they do, I do not have knowledge yet), do not show profit or show small profit, book value increases.
Since I was behind AMZN when it was $725 to 750, left TSLA at $180 as I did not have cash to purchase. Last year, I made speculative run with TSLA options which I stopped after Mar 2016 !
Instead of the usual model of claiming on future earnings, your claim is on an increasing larger asset worth.
Technically, these high tech hot stocks exhibits some kind of cup and handle… bullish chart formation.
I think my problem with tesla is that I don’t understand what makes it special compared with other car manufacturers like BMW which is also making moves into electric and self driving. Pretty much all car companies are heading that direction. So a bet on tesla is a bet on Elon musk the person. It’s not a bad bet. Maybe I should have made the same bet. Just not comfortable enough.