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The QCOM Thread
#21
Held MSFT, CSCO and INTC with the never sell mentality. Fifteen years later I admitted to myself that was an idiotic idea because I could have bought just about anything consumer staple and been FAR better off. Wish I had taken some profits when I was up 200 to 300% and they had PE's north of a zillion. Valuation always matters in the end, and nobody here is immune. It took Buffet a long time to admit holding KO at a PE of 50 was just stupid. Cheer leading doesn't pay all that well at some point. 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. Call it patience if you like. I call it a real bad idea. It's a small miracle I hit my long-term investing goals in light of mistakes like this.
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#22
(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.
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#23
(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.

I know my post came off as targeting yours.  My only point is blind commitment to ANY strategy is not prudent.  Things change.  I bought some early shares in those awesome companies.  Unfortunately I also averaged in more money as their valuations became irrational.  Few didn't back then as you were missing the bus if your didn't overweight tech.  It's quite possible to buy and hold great companies and effectively lose.  Holding shares for decades for an eventual break even or 25% recovery gain is not a win if lost opportunity is factored in.  This is however supporting evidence for extreme over-diversification which I don't do, because I think you might as well just buy a low fee S&P index fund and go fishing.  Smile

And my greatest investing mistake were buys early in my career. Buying stuff that was extremely overvalued thinking time would fix it. Valuation always matters in the end with mature companies.
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#24
(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.
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#25
(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.
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#26
(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...
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#27
[quote pid='16588' dateline='1551873226']

But as WB has said--no one ever went broke taking a little profit off the top--something like that...
[/quote]

The "off the top" part of that statement is probably the key to increased probability of success.  When things go your way, peeling some profits will often be wise. My investing heroes like WB say a lot of things, and added all together you get some contradictions you have to sort through.

WB's number # rule is don't lose money.  That's a little vague of course, and to me it means don't take unnecessary risk.  If you put a kill shot on your port it's hard to recover.  WB is also a value investor, that is inarguable.  Now add those two rules together and it implies you don't mindlessly hold a huge position in KO when there is no hope a low growth industry can justify the PE even if a decade of good times occur.  I am cherry picking one position that fits my thesis, and hindsight is 20/20, though he had to know the danger.  Berkshire positions are so large, and they have to report trades which swings the market, so leaving an overvalued position quickly enough isn't even a real option for him anymore.

In the end Buffet and Munger got rich over investing in a short list of good companies.  They didn't try to be an S&P 500 index fund with 100 positions, or swing trading from stock to stock.  There is a lesson in that too.  Buy and mostly hold forever has served them well.  All you have to do is pick some above average companies and stay in the market for 70 years and it all works out.  Smile
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#28
Glad I bought QCOM when I did. It's headed to $60. Yield is still 4.6%
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#29
(03-06-2019, 07:29 AM)fenders53 Wrote: WB's number # rule is don't lose money.

In the end Buffet and Munger got rich over investing in a short list of good companies.  They didn't try to be an S&P 500 index fund with 100 positions, or swing trading from stock to stock.  There is a lesson in that too.  Buy and mostly hold forever has served them well.  All you have to do is pick some above average companies and stay in the market for 70 years and it all works out.  Smile

Yea, I've always liked that rule...ever notice when he says it it always seems to follow with a chuckle--it's almost like he's joking but serious at the same time or who knows maybe he knows it's easier said then done...

WB, "Rule number one--don't lose money. Rule number two--don't forget Rule number one."  LOL


Yes...it's true and he's talked about that diversification keeps you safe but a concentrated portfolio will make you wealthy.

And man...70 years!! He mentioned that at the last Berk meeting, how they were born at the right time with the right desire and skills to have done what they did. That it probably can never be duplicated.

Investing is a not a race it's a marathon.

What struck me about WB and CM is their humor, a sense of humility, and extremely I mean extremely intelligent and quick.

At the meeting, people ask questions, some people try to stump them and they don't. This one guy, he was I believe an Economics Professor from Columbia or Cornell and he asks this really complex financial question. WB laughed and said I have no idea, I don't even know what that means. Then CM responds by saying that anyone asking a complex question like that already knows the answer and doesn't deserve one because he's just trying to prove his own intelligence in front of others--NEXT QUESTION!
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#30
(03-07-2019, 06:49 AM)rayray Wrote:
(03-06-2019, 07:29 AM)fenders53 Wrote: WB's number # rule is don't lose money.

In the end Buffet and Munger got rich over investing in a short list of good companies.  They didn't try to be an S&P 500 index fund with 100 positions, or swing trading from stock to stock.  There is a lesson in that too.  Buy and mostly hold forever has served them well.  All you have to do is pick some above average companies and stay in the market for 70 years and it all works out.  Smile

Yea, I've always liked that rule...ever notice when he says it it always seems to follow with a chuckle--it's almost like he's joking but serious at the same time or who knows maybe he knows it's easier said then done...

WB, "Rule number one--don't lose money. Rule number two--don't forget Rule number one."  LOL


Yes...it's true and he's talked about that diversification keeps you safe but a concentrated portfolio will make you wealthy.

And man...70 years!! He mentioned that at the last Berk meeting, how they were born at the right time with the right desire and skills to have done what they did. That it probably can never be duplicated.

Investing is a not a race it's a marathon.

What struck me about WB and CM is their humor, a sense of humility, and extremely I mean extremely intelligent and quick.

At the meeting, people ask questions, some people try to stump them and they don't. This one guy, he was I believe an Economics Professor from Columbia or Cornell and he asks this really complex financial question. WB laughed and said I have no idea, I don't even know what that means. Then CM responds by saying that anyone asking a complex question like that already knows the answer and doesn't deserve one because he's just trying to prove his own intelligence in front of others--NEXT QUESTION!
WB and CM are quite the characters.  At times they come off as folksy and even overly simple.  That's not the case of course.  You have to read a few books, or at least listen to a lot of their interviews to begin to understand proper context.  I like to try to live within some investment rules.  I steal most of my rules from investors like them.  I have no doubt their are some Ivy league professors that are more intelligent, but they would likely be no more successful than you or I at investing.  I will always follow WB's rules but understand I can't possibly replicate WB or the last 40 years BRK.  If I put 25% of my net worth in JPM or KO, they aren't going to invite me to be on the board, or give me some sweetheart insider can't lose deal on preferred shares.  He is often treated like he founded the company when he enters the picture.  

On a side note I was advised not to get into KHC by somebody, even though it was a "WB stock".  They told me KHC was pillaged considerably some during the restructuring transformation, and only the scraps were left for me.  As I dig in, that appears to be based on some truth.  I did buy KHC, though it was later on and I missed half the bloodbath.  Some regard WB as a corporate raider.  I see him as a philanthropist at this stage of his life.  I'm sure they will be writing books about him for decades after he is gone.   

To me the take away lesson is a reasonable selection of stocks will pay off over the very long term, even if you make a lot of mistakes.  Few of us are fortunate enough to invest for 70 years, and start right after WWII, but the point still remains valid.  WB may have missed the Great Depression, but there were plenty of bad investing years he survived just fine with his strategy.  But I'm still not holding my KO shares if the PE ever hits 75 again.  Smile
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