03-06-2019, 06:53 AM
(03-04-2019, 03:21 PM)fenders53 Wrote:(03-04-2019, 02:22 PM)Otter Wrote:(03-04-2019, 12:10 AM)rayray Wrote:(03-03-2019, 08:08 PM)fenders53 Wrote: ....If INTC and CSCO run up another 40% from here, after the longest bull run in the history of the US market just occurred, then I would be even after only about 20 years...
Man!! Sorry to hear that!
That's amazing because both those companies have done fairly well from 2009 to 2019
I should say "for me" those companies are a never sell--my biggest money mistakes were sells and that's why I don't sell anymore. It still bothers me that my sells left 500k plus on the table--I'll never forget because some people close to me like to remind me every-so-often about my sells and call be stupid. I don't even want to know what certain sells are going to be worth in another 20 years. But I will...cause I'll look and calculate.
If I buy a stock I'm holding it till I'm dead, it's less stressful.
The AAPL shares I bought in 2003 and sold in 2005 for more than double what I paid would like a word. Still hurts to think about. One of my very first sells.
I have some bad sells as well. We all do of course. And there are some select companies that look like they should never be sold ever............ in hindsight anyway, and most of us probably agree it's a short list.
I clearly remember telling people on message boards "nobody has ever sold INTC or MSFT and been happy they did a year later". That was a true statement in 1999. Shortly thereafter it was not. CSCO, INTC and MSFT outgrew their place in my port back then. For whatever reason, I truly don't recall, I chose to sell a lot of CSCO and buy JNJ and XEL which I held for decades. Twenty years later JNJ started looking a little frothy and I spread some of those profits around not so long ago. I missed the big JNJ pullback which was blind luck, and I consider that temporary anyhow. INTC and MSFT devastated my port for a decade because I had been trained to keep my courage and hold. I'm not saying I should have dumped all positions in 2000 because none of us know what tomorrow brings. What I should have done is not be so greedy and at least diversify, trim back some of my holy grail stocks. I could have bought damn near anything and been better off. For the most part, only tech was overvalued beyond any hope of growing earnings into the share price. From that day forward, when I am fortunate to get an irrational short term gain, I strongly consider taking a little profit and it gets directed to something most would consider undervalued, or at the very least not on the momo train. I may miss the absolutely top for some of my shares but I won't go broke doing that.
Now on to your current example. AAPL is at $175 and trades at a forward PE of something like 15? What if it goes parabolic like all tech stock did in the 90s? The shares are now $875 and the PE is 75. That is exactly what happened to any decent tech stock in the 90s. Somebody out there is going to find a way to lose a lot of money in AAPL in this scenario, while we tell them it is impossible to do that so don't be stupid and just hold and never sell a share ever. People used to say that about IBM, Xerox and Polaroid. IBM still has a chance lol.
Sermon over I guess, but no stock attains diety status in my port ever again. I may hold some of the shares forever, but I won't be greedy to an extreme. Valuation does matter. (Yeah I keep repeating that lol) Hope you read this the way I intended it. You guys are solid investors as best I can tell. I learn a lot from you guys whether you realize it or not, and I love this forum.
Fenders--I wasn't offended, not at all! And I do understand what you're saying and it does make sense--it's nothing I haven't thought of and not done in the past. I suppose within the last few months I've been thinking about my "sells" ever since the RHAT/IBM buyout, then I think of my MKL and Exxon, Paychex Okay...the pain is too much lol. For the time being I'm in a never sell mood.
And it really helped during the Great Recession, that I bought and didn't sell. I have friends that sold and or cashed out--it devastated their portfolio's forever--it's not going to help that some of these people I know just got back in within the last 2 or 3 years--setting themselves up again. I know someone with a Finance degree from Penn State, I asked him one day, "How come you love to buy high and sell low? Aren't you supposed to do the opposite?" He just glared at me--and I asked him this about five or 6 years before the Great Recession--what did he do--he cashed out in March 2009!! When does he go back in? 2014/15...I don't know....I would bet my left nut that he sells after the next downturn.
But as WB has said--no one ever went broke taking a little profit off the top--something like that...