REPETITION....is the KEY to long term investing. ACTUALLY....it is the key to just about everything we do in life. SO, I LOVE to reinforce my investing habits by repeating the same message to MYSELF over and over. A form of self-hypnosis. In sports they call it muscle memory. In investing it is muscle memory for the BRAIN: Creative Long-Term Investing Is The Best Kind https://seekingalpha.com/article/4393840-creative-long-term-investing-is-best-kind (BOLD is my opinion OR what I consider important content) "Summary: Investing is a long-term project. In the short run, there will be sell-offs, corrections and even crashes. Knowledge of these 'bad' events cripples many investors' prospects. The most successful investors focus on researching the best prospects (companies) to own for the long term - and do just that. Be strategic and optimistic for better returns over time. Introduction There will not be single chart or statistic in this piece. There will be references to 'famous' investors, timers, and market shorts, for the sake of illustration. I will mention certain stocks - some that I own or did own and some that I have never owned. I firmly believe that a minority of market participants are true investors, if an 'investor' is someone that places resources in the markets with the purpose of making solid returns over time. The majority is actually composed of Bears and market timers. Bears and market timers want to be successful investors or traders, but often operate on misguided assumptions and counter-productive short-term focus. The more successful participants mix correct assumptions, longer-term focus and emphasise patience, self-confidence and optimism in their decisions. These are true investors, and are much more likely to build excellent portfolios over time. Recent research towards analysing stocks such Tesla (TSLA), suggests that additional factors help create exceptional investors. These people seek to understand companies deeply. They want to understand a company's 'DNA,' the thought processes of its leaders. The focus is on what the company is made of, the quality of its leadership and products, and the rate of its progress towards its own goals. Some investors will even minimise the role of metrics and earnings reports in their work - in order to focus on those factors. One investor that fits this profile is Dave Lee (available on YouTube). I do not claim to be among this group. I have fallen victim to short-term thinking fairly often and sabotaged my own investing results. Still, I am confident that my own strategy has improved by aligning my thinking with successful investors of past and present. Common & Flawed Market Assumptions The approaches of successful and famous investors are very different from those of many market participants. Common and flawed assumptions may include beliefs such as: * Negative macro events and phenomena will cause a correction within 'x' time (usually months or a few years); * Profits are not profits unless you take them; * A stock that has had a large, swift run-up must inevitably correct or even crash; * Only boring, established stocks are worth a long-term investment. Start-up or 'story' stocks are inherently volatile and thus too risky to own. The impact of macro events on stock markets is always uncertain and often exaggerated. Put another way, while some powerful real-world events - COVID-19, the 2008 financial crisis, 9-11, etc. - do impact markets, they can rarely be predicted. Of the three, only very aware, market-savvy people might have predicted the 2008 event. Of these, only a small minority acted on those insights to their own profit and benefit. In some cases, individuals such as Michael Burry that did act boldly have been frequently wrong since. Burry was portrayed as genius material in 'The Big Short,' a market savant. And he may yet be. But nobody is perfect: even Albert Einstein derided 'The Big Bang' when it was first proposed. For long-time investors, it makes more sense to watch and learn from Joel Greenblatt, Warren Buffett, Peter Lynch, Bill Miller or Ron Baron than from the stars of The Big Short. A market savant may be ideal to predict or even profit from events like 2008. However, the nature of their genius is not likely to help your long-term investing. Profits are not profits until you take them. True, numbers on paper are just that. Letting a stock run means taking the risk that its share price may correct, even severely. It is true that, if you do as I did with ROKU, and cash out at 74 per share after investing at 34 per, the profit is tangible. It is also true that, had I held onto my ROKU shares, they would be worth over 296 dollars each today (6 Dec. 2020). I did quality research on The Trade Desk (TTD) and made a smart decision to buy. But the Bear and market timer in me provoked a sale of TTD. As for the belief that numbers reflecting shares of securities in a brokerage account are inherently risky, no form of money is guaranteed. I recall very well seeing lines of people in an affluent suburb of Silicon Valley waiting to cash out their Washington Mutual accounts in 2008. The price of gold sometimes declines, precipitously, and can remain depressed for years. Bitcoin? A decent bet as an evolving alternative to gold or other metals - but hardly proven as a present-day alternative to paper assets. Few people that decide to cash out all stocks will turn to Bitcoin in a one-for-one assets swap. High-trajectory stocks will inevitably correct, savagely. There are many examples of this kind of price action, but the trend is not comprehensive. Many young 'hot names' are inherently volatile. Their stock will decline more than the average during a correction; in a severe correct that decline may be profound. An example is Amazon (AMZN) and Ron Baron. This billionaire, who has made a fortune investing in Tesla (TSLA), studied Amazon in its early days, visited Jeff Bezos and yet did not build a position in AMZN. In a CNBC interview with Becky Quick, Baron refers implies that this actually made him more decisive about Tesla. He was, and remains, untroubled by the trajectory of TSLA stock. None of that impacts the long-term thesis if the story is sound. If it is inherently flawed, that is another story. If certain stocks are caught up in a vast bubble, as happened with Cisco (CSCO) during the dot.com bubble, that is a single phenomenon in a much larger sample. The argument that we are now wrapped in such a bubble is certainly interesting and relevant, but does not negate the essence of long-term investing or the value of filling a portfolio with names in which you believe. Only boring, established companies make sense to hold for the long term. I think this is pretty obviously not the case. Tesla, Amazon, the young Apple (AAPL) and a host of other names - including those that will emerge from a list that includes ZM, CRWD, SNOW and LMND (among others) - made great sense to hold for the long term. Amazon and Apple have become the very type of established company that introduces a measure of safety to a portfolio. Every company that is 'boring' or 'safe' today was once young, with uncertain prospects. Others such as IBM, GE or even CSCO prove that no stock is a bond (even bonds are no longer bonds, in a way). Some blue-chips will crater, and others apparently on the way there will never arrive. No matter the stocks in which you do invest, your chances for long-term success are only great if you avoid the perils of bearishness and timing. A few points in that regard: 1. Staying a Bear cripples long-term results, for bearishness ignores market history; 2. Market timers make up an interesting, heterogenous, eclectic group of market participants. Often, they become very reliant on indicators in a series of complex technical charts - and are driven to trade based on those charts. Timers believe they can predict the short-term price action of a single name, sector or the entire market. As a group they are usually proven wrong. Summary: Be like Buffett, Baron or Greenblatt Today it is fashionable to claim that the markets are in a huge bubble and that doom awaits just around the corner. I am aware of these arguments, have read the articles and seen the charts on debt and unemployment rates. Even if the proponents of a soon-to-explode bubble are right, it does not change the thesis. The game is about selecting and buying the companies in whose businesses you believe. Warren Buffett is legendary for his quotes on the topic. So many have appeared in articles here that I won't repeat them. Peter Lynch was all about understanding the businesses in which you invest, and waiting. Buffett's long-term partner Charlie Munger talks about buying names in which you have confidence and then waiting (Munger's language is more colourful). Joel Greenblatt is rather boring to listen to, proving that genius need not be interesting. Bill Miller is not really exciting to listen to, while Ron Baron is lively and delivers a nice turn of phrase. But what Baron says about his own investing history (witness his comments about AMZN and TSLA) is more compelling than his low-keyed delivery, often against the backdrop of some pretty scenery. Dave Lee, while not a money manager, is a brilliant researcher that uses 'first principles' and studies companies that he finds intriguing. Here is another example - Lee's interview with Lemonade's (LMND) CEO Daniel Schreiber. Lee, Baron, Greenblatt, Lynch, Buffett, Munger and Miller are (or were, in the case of Peter Lynch) very different people, yet they shared certain characteristics - intelligence, fascination with business and the markets, intense curiosity, love of research, comprehensiveness and self-confidence. We can all become better investors if we listen to them while reducing those pesky urges to bearishness and market timing. More research, less short-term thinking, more patience, and, yes, more self-belief. Best of luck investing. MY COMMENT It is the "little" articles like this that lay out the basis for long term investing. The concepts NEVER change. What leads to success NEVER changes. REPETITION, repetition, repetition. AND...we know from the data and academic research that ONLY a small minority of people are or will be true investors for the long term. I am a SIMPLETON......every day.....all my life...repeating the same things over and over about investing. I was typing the same message on my first investing message board (MSN) 25 years ago. The SAME portfolio model, the same long term mantra for the same reasons. MOSTLY different companies....those were different times......but, the same concepts worked than......and.....THEY STILL WORK NOW.
There is a POST on PAGE SIX of this thread.....post number 103..... that I often go back and read....over and over. To me it is the single most valuable post in this thread. It is a GREAT historical lesson and......to me....a perfect road map for investing success. I will not repeat it....anyone can go back and look at it.....but....here are the core concepts for success: EXCERPTS: "There is a deep and important debate going on in the investment community, one with profound repercussions for both professional money managers and their clients. Some believe that Buffett is right—that we have become an asset-light economy and that value investors need to adapt to accommodate such changes. Noted value managers like Tom Gayner of Markel Corp. and Bill Nygren of Oakmark Funds, for instance, count companies like Amazon and Alphabet among their top holdings. The fact that these stocks often trade at above-market valuations—a factor that once scared away orthodox value investors—hasn’t deterred them, because the companies’ futures are so bright that they’re worth it." "All value investors continue to agree that price is an important component of value—that’s why we’re called value investors. What’s happening now is a debate about what the drivers of value are—of what constitutes value in the 21st-century economy—and what will drive both the economy and the market forward over the next generation." "Always look for a business with a clear-cut competitive advantage" "Try to find companies with a small market share, a huge addressable market, and a large competitive advantage." "never confuse a growing industry with a profitable one." "Avoid businesses whose best days are behind them. This is true even if you’re paying a cheap price relative to current earnings or book value because, in the long run, underlying business quality trumps price." "If the postwar era was about consumer brands operating at scale, the early 21st century is about what we might call digital platforms. Like the branded enterprises before them, they have the permanence and probability that make for a good long-term value investment." "Unlike branded companies, digital businesses often benefit from network effects: the tendency of consumers to standardize on a single platform, which reinforces both consumer preference and the platform’s value. Because of this, the market shares of these platform companies dwarf those of the consumer products giants; software businesses like these are often characterized by a “winner take all” or “winner take most” dynamic. Combine this with the fact that they require little to no capital to grow, and you have Value 3.0—business models that are both radically new and enormously valuable." MY COMMENT This article on page SIX of this thread.....POST 103....is a substantial history and discussion of the EVOLUTION of VALUE investing. TO ME......it reflects the MODERN synthesis of VALUE and GROWTH investing. It explains WHY companies like TESLA....that seem massively overpriced......may in FACT be value investments. I HIGHLY RECOMMEND to anyone reading this thread.....go back to page 6 and read the article posted in post 103.....I do.....OFTEN.
Well your model looks very similar to TQQQ Pro Shares ETF which has been beating S&P quite a bit lately, or ARK Invest. Like those companies you have, Many Jim Crammer is hyped on as well.
Agreed WXYZ. For example, a partner at the firm i am working at is looking for new investment options. He has decided he wants to give day trading a shot. He’s also gone big (at least what I consider big) into a cryptocurrency (to his credit he wants to hold this crypto for at least a year and won’t sell even though it has doubled). We talk about investing semi frequently and I tell him about my long-term plan and how most of my investments are in my 401k and Ira’s and he will balk at the fact that my plan is to build wealth over 30 years. My goal of getting a 12% a year seems to low to him. Lol. He found a guy who knows how to trade and is following his advice. We are all familiar with how well that approach works.
I am quite happy with my current portfolio and glad I kept many of the companies I believed in even through the current crisis we had. One company I am struggling with understanding its place in terms of “value” is ZM. They have a stellar financial spread sheet, they continue to be profitable and innovative, but lately are “perceived” as a thing of the past. They are now classified as a “past trend”. Almost makes no sense to me. I bought the company last month as I recognised its strength in the current market and it almost seems like most of it is being grossly downplayed by the current market. It’s not really a big deal for me as my overall portfolio is looking good, but it does consume me lately. Wonder what everyones opinion is in relation to ZM and its “value” prospects
i don't have any opinion on zoom's value, but the price moves on covid news as if it were a drug company. i was playing it for a while and lost my ass when some good covid news hit. not touching it a again anytime soon.
Welcome Stockbits. Feel free to post whatever you are inclined on any sort of investing. I find that people posting ACTUAL EXPERIENCES is perhaps the most value to me as an investor. It is ALWAYS educational to see what, why, and how others are doing. That......re-post.....of my FIRST post on this board is a blast from the recent past....a little over two years ago. HERE is my current portfolio model.....the evolution of my portfolio and holdings has been documented in this thread over the past 2+ years in REAL TIME.....as it happened. I AM a long term investor.....but I am not afraid to make changes as needed. I am once again posting my PORTFOLIO MODEL. My initial criteria to start the process to consider a business are.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON, etc, etc, etc. PORTFOLIO MODEL "Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 55% of the total portfolio and the fund side at about 45% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing. As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 12 stock portfolio. At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD. STOCKS: Alphabet Inc Amazon Apple Costco Home Depot Honeywell Nike Microsoft Proctor & Gamble Tesla Nvidia Snow (100 shares, a rare, long term, speculative holding) MUTUAL FUNDS: SP500 Index Fund Fidelity Contra Fund CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (71). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)" MY COMMENT This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my twelve stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.I DO NOT do market timing or Technical Analysis."
Jwalker......it is possible to have a long term horizan and STILL do very well.....sooner than 30 years. I am a long term investor....but at times I have seen STERLING OPPORTUNITIES that required action. AND....I have taken that risk. As I have mentioned on here many times....going BIG into MSFT in 1990. Siting out the May 2008 to March 2009 time period. Investing in stocks like NKE, SBUX, COST, back in the old days when they were YOUNG but potentially DOMINANT companies. Investing in the current crop....AMZN, APPL, TSLA, etc, etc. Recognizing that it was time.....for me....to get back into MSFT, and NVDA, etc. I try to follow my total long term focus all the time......but......as a financial hunter/gatherer.....I run with what I can. If I SEE an opportunity.....I will take what I am given. The KEY for me is those opportunities have to have LONG TERM potential. They might even make a lot of short term....explosive....money. But they have to be something with long term, world dominating, potential. The BOTTOM LINE....keep doing what you are doing Jwalker......and in ten years see where you are compared to your day-trading friend. I remember the day trading CRAZE in the 1990's. VERY FEW....perhaps....NONE of those people day traded for any REAL span of time....especially years. Within a short time they had ALL given up. It is easy to trade successfully for short periods of time.....but sooner or later time the markets catch up and HAMMER you. I think people like EMMETT are smart. He trades a very small portion of his money 5-10%. If you like the excitement and the challenge.....go ahead and trade some very small amount of your money......not that anyone needs my permission. BUT....get carried away and the END result will NOT be pretty.
Yup. Haven’t had any position experience such a drastic drop since covid devastated the market. Difference is I always knew the companies which lost value will come back once things settle. With ZM the media makes it seem as if it’s a fad and some sort of a “gimmick” of a stock... Makes it very hard for me to believe but I certainly don’t discount the shift in trends as of late
i wouldn't go so far as to say i'm smart, but i need that money down the road and will not gamble with it. as of today, 9% is my play money. the other serious money is in two mutual funds, FXAIX and POGRX.
"Well your model looks very similar to TQQQ Pro Shares ETF which has been beating S&P quite a bit lately, or ARK Invest. Like those companies you have, Many Jim Crammer is hyped on as well." Stockbits TQQQ is really......in my opinion.....NOT similar to what I do at all. First it is designed to replicate the NASDAQ 100. So it holds at least 100 stocks or more. It is also TRIPLE leveraged....designed to return triple the return of the NASDAQ 100. I ONLY currently hold 12 stocks. And of course.....my holdings are NOT leveraged. The stocks I hold are NOT based on the NASDAQ 100.....some might be in there...but what I do has NOTHING at all to do with that index. BUT....you are correct Stockbits.....and....I assume this is what you were getting at in your comment...... in the fact that it is considered a LARGE GROWTH stock vehicle. INCIDENTALLY.....nice open today.
Sold it this morning at the open. It really messed up my entire portfolio and I could care less if it comes back, which it probably would. And again, I think it’s a fantastic company to own, but those huge shifts are simply not for me. I was fine with my positions falling during covid and actually bought a lot of my winning positions during that dip, but ZM is just something I don’t think I’ll understand till I have a little more (or ALOT MORE) experience with the market. Still up 12% on my “Tech” portfolio so nothing to worry about.. Just the cost of learning I suppose.
GOOD MOVE....Zukodany. I dont follow ZM....but.....with what you are describing....selling seems reasonable. Just because you sell does NOT mean that you can never own the company. In the future....if you wish....you can repurchase if necessary. in the meantime you are free of an erratic holding that is dragging you down. I will mention....in regards to ZM....most people I know are SICK of virtual meetings and hate them. As for ME......so slightly red today as to be EVEN.....I was down by -0.0007%. So I guess....technically....red, but in terms of money FLAT. I was able to beat the SP500 by .44% however. Another day of stimulus drama......with little clear direction. I DO still see the near term 1-6 months direction as being STRONGLY POSITIVE.
Zukodany.......when I sell a stock that is disappointing me....and....that money is going immediately into one of my funds or another stock....I do NOT consider it a loss....It is a LATERAL MOVE. Stock market money that remains stock market money going forward. I dont know if you have held ZM this long.....but looking at the chart I see that it hit a recent high on October 19 of $568. Since that time it has gone down to the price of $395 on December 14 when you sold. I say...you made the right move.......and now......ONWARD. That money can be put into something else. Never look back or second guess yourself.
yup, this was really one for the record. A company that shot through the roof in such a short period of time and I... bought it right at the top before it started selling off.... I was so sure I’m getting a long term position with that one... never in a million years I thought it would crash and burn so quickly... so yeah... sold it and never looked back... now that money is with more Amazon and Tesla where it belongs I have another one which is totally down by a large margin, salesforce, but... I’m totally totally not worried about it... it’s a great company to own in my opinion and just may take some time till it goes up again. Funny about salesforce.. it was going up since it was optioned for the s&p and soon thereafter started to go down, I wonder if that is a known trend with companies that get into the s&p? just a random thought... Again, no experience here, and I’m not trying to time the market on great companies which I believe in so no worries at all... Today I was up a whole point... lots of green and great way to start the week... Nvda Ntflx tsla & PayPal were my leaders today. Let’s see what happens with the rest of this week
Barely ended green today with a total gain of .06%. Not too bad I suppose. My big winner for today was ATVI. They’ve got some great feedback on their new games and I foresee them having a lot more good news coming. Finally broke into the green on my holding which feels good.
YES....picking stocks to hold for the long term is much more difficult than it sounds. That is why I TRY to stick with PROVEN......big cap....winners. I think you did good with moving that ZM money to AMZN and TSLA. I do not own it but have looked at Salesforce a little bit lately due to their connection to SNOW. Certainly a good company from the little I have read. As to stock picking.....I consider it a major victory if I buy two stocks and one of the two ends up being a KEEPER. When I bought HON as a new holding I also bought Constellation Brands at the same time. I dont think I kept it for more than a month before ditching it. I dont like stocks that LURCH up and down and seem to be erratic. That is why I NEVER buy......financial companies like banks, insurance companies, oil companies, auto companies, drug companies......they seem to do a lot of erratic up and down moves and seem very sensitive to the general economy. I have owned various stocks in these categories multiple times and NEVER seem to hold onto them.....so now I just.......AVOID them. I dont really know anything about ZM....but....it seems to me sort of a one trick pony stock. I LIKE stocks and companies that are more like CONGLOMERATES......multiple products and income streams. I think it is a BIG MISTAKE....how companies are selling off....well known, household name....product lines in the name of creating shareholder value. I see multiple product lines as a big strength. UNFORTUNATELY the current fad is to downsize companies to more and more isolated and focused businesses.
