“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”Winston Churchill, the U.K. prime minister who stood up to Nazi Germany Avert your eyes … cover your ears. I’m about to commit “investment blasphemy.”
And I'd say it's not arbitrary. BUT, that time frame does vary from one opportunity to another.
A special situation play might be shorter ... a couple of years. Three to five isn't an unreasonable holding period for a stock that's allied with a strong "storyline" (narrative).
And don't be afraid to go even longer if you have something that's working for you ... and you have the "time" runway to do so.
In his book "Same as Ever," Morgan Housel says 10 years or more seems to be optimal, since that stretched out time frame washes out the ebbs-and-flows of the market, mitigates any mistakes we've made and really gives you the benefit of compounding.
I've been doing this for a long time -- and by "this" I mean investing myself and writing about the financial markets (first as a national business reporter and then in ventures like this one here at Stock Picker's Corner.
I covered public companies, dealt extensively with both the buy side and sell side on W.S., and have have seen how most investors conduct themselves. Which means I've seen the missteps they've made.
Public companies and a lot of (if not most of) institutional investors measure themselves against short-term yardsticks. Retail investors see this and emulate that behavior. It's tough to win under those constraints. When they see they're "lagging," they make "adjustments" ... and often move out of a stock or investment just before it starts to move ... and into one whose hot streak flames out.
And I'll tell you ... retail investors have a massive "edge" over the investment pros ... by avoiding options, avoiding trading, keeping their strategies and investments simpler and making time their personal ally. I believe that.
Thanks for this second kind comment. And, again, your savvy, thought-provoking comment.
I believe people are either Wealth Builders ... or Wealth Killers. Same with money strategies. I've said this for years and have made it a mantra here. Wealth is the key focus here at Stock Picker's Corner ... creating it ... and keeping it.
I got started as an investor (and I wrote about this at my last newsletter, and I'll be writing about this here soon) because of the 87 Crash. I was working as a reporter and couldn't understand how stocks could be worth "X" one day and "X - 22%" a day later. I started reading, and that inspired me to make my first investment (a utility stock I still own some of today). My first broker was a value guy ... so I guess I was schooled in that discipline. And the money manager I co-wrote a book with (Contrarian Investing via Prentice Hall in 1998, I believe) was a lump-sum distribution specialist, and was kind of a value/contrarian, too).
I say that because, as investors, many of us are influenced by our upbringing/environment. And if that influence is bad ... or is AWOL (meaning we didn't get "educated" about money), the outcome can be unfortunate. The folks in those categories don't build generational wealth, or squander it when it comes their way through an inheritance.
A few years back, I got my son Joey started (he was 11 or 12 at the time). I "staked him" with $2,000 and said: "We're going to get you started investing, and we're going to do it TOGETHER." We talked about what he liked ... was interested in ... bought ... used. He liked xBox and Minecraft, so we got some Microsoft. He liked Mac & Cheese, so we got some Berkshire. Same with Apple and Netflix and a few others. He got Microsoft at $103, Berkshire at $207, Netflix at $342 ... you get the idea.
Now he's a junior in H.S. A few of the picks haven't worked out as well. But he's made some nice money. And that money isn't the most-valuable result of our "father/son investing project."
Joey pays attention to money. He often comments about the companies he's got shares in. I mean, he doesn't follow them like a hawk. But he's "sensitized" to them and relates things he sees. That's OK ... he's a kid. But he took a business class in high school ... that he chose. He talks with me about the economy ... the State of the Union ... inflation ... the "cost" of stuff -- and how it affects him.
A year ago, he decided he wanted to get a part-time job (we said OK, as long as the grades stayed high). He's had that for two years ... is a conscientious worker ... has a bank account, a small credit card, and has saved nearly $4,000.
Joey is a really terrific kid ... a great son ... a good student (NH Society, in fact) ... who I love being around ... and who even treats my Mom (his grandmother) with kindness and respect. J
He's got a curious mind (like me .... and like YOU). He thinks about music, cars, sports (like all kids). But he's interested in business ... and is ESPECIALLY interested in our substack venture ... he figured out the dashboard, and every day he comes home from school, and looks to see how we're doing.
You can't put a price tag on that ...
Some of that, I grant you, is because of my career as a financial journalist, columnist and newsletter writer/editor/analyst/"guru" (whatever term you wish). He takes an interest in my work. And he's a bright kid.
Here's where we come back to your EXCELLENT question: What creates ... or what you you have to have to create ... generational wealth?
I wonder if Joey's "immersive" experience we shared has given him a view of money that isn't taught in schools (but should be), and isn't taught by most parents (but should be). I think he'll be smart with money ... smart enough to be part of a generational wealth "chain."
You know what I mean .. someone makes the fortune, and is smart enough to keep it once it's built. That gets passed to the next generation ... which (at the very least) has to be wise enough about money to manage/keep what they got. Even better would be a "next generation" investor who can add to that .... to be passed along to the NEXT (hopefully ready) generation.
That education/immersion/experience is what's needed ... to build ... to keep/manage ... and pass along a cache of cash that qualifies as "wealth."
Apologies for the long (and personal) response. I'm actually working on something for here on this ...
So ... let me ask YOU? What's YOUR response to YOUR question? Because I'm truly interested to hear your thoughts. Bill P.
Vision: A savvy question. And I mean that.
And I'd say it's not arbitrary. BUT, that time frame does vary from one opportunity to another.
A special situation play might be shorter ... a couple of years. Three to five isn't an unreasonable holding period for a stock that's allied with a strong "storyline" (narrative).
And don't be afraid to go even longer if you have something that's working for you ... and you have the "time" runway to do so.
In his book "Same as Ever," Morgan Housel says 10 years or more seems to be optimal, since that stretched out time frame washes out the ebbs-and-flows of the market, mitigates any mistakes we've made and really gives you the benefit of compounding.
I've been doing this for a long time -- and by "this" I mean investing myself and writing about the financial markets (first as a national business reporter and then in ventures like this one here at Stock Picker's Corner.
I covered public companies, dealt extensively with both the buy side and sell side on W.S., and have have seen how most investors conduct themselves. Which means I've seen the missteps they've made.
Public companies and a lot of (if not most of) institutional investors measure themselves against short-term yardsticks. Retail investors see this and emulate that behavior. It's tough to win under those constraints. When they see they're "lagging," they make "adjustments" ... and often move out of a stock or investment just before it starts to move ... and into one whose hot streak flames out.
And I'll tell you ... retail investors have a massive "edge" over the investment pros ... by avoiding options, avoiding trading, keeping their strategies and investments simpler and making time their personal ally. I believe that.
Appreciated the comment. Well done.
Hope we hear from you regularly. Bill P.
Thanks for this second kind comment. And, again, your savvy, thought-provoking comment.
I believe people are either Wealth Builders ... or Wealth Killers. Same with money strategies. I've said this for years and have made it a mantra here. Wealth is the key focus here at Stock Picker's Corner ... creating it ... and keeping it.
I got started as an investor (and I wrote about this at my last newsletter, and I'll be writing about this here soon) because of the 87 Crash. I was working as a reporter and couldn't understand how stocks could be worth "X" one day and "X - 22%" a day later. I started reading, and that inspired me to make my first investment (a utility stock I still own some of today). My first broker was a value guy ... so I guess I was schooled in that discipline. And the money manager I co-wrote a book with (Contrarian Investing via Prentice Hall in 1998, I believe) was a lump-sum distribution specialist, and was kind of a value/contrarian, too).
I say that because, as investors, many of us are influenced by our upbringing/environment. And if that influence is bad ... or is AWOL (meaning we didn't get "educated" about money), the outcome can be unfortunate. The folks in those categories don't build generational wealth, or squander it when it comes their way through an inheritance.
A few years back, I got my son Joey started (he was 11 or 12 at the time). I "staked him" with $2,000 and said: "We're going to get you started investing, and we're going to do it TOGETHER." We talked about what he liked ... was interested in ... bought ... used. He liked xBox and Minecraft, so we got some Microsoft. He liked Mac & Cheese, so we got some Berkshire. Same with Apple and Netflix and a few others. He got Microsoft at $103, Berkshire at $207, Netflix at $342 ... you get the idea.
Now he's a junior in H.S. A few of the picks haven't worked out as well. But he's made some nice money. And that money isn't the most-valuable result of our "father/son investing project."
Joey pays attention to money. He often comments about the companies he's got shares in. I mean, he doesn't follow them like a hawk. But he's "sensitized" to them and relates things he sees. That's OK ... he's a kid. But he took a business class in high school ... that he chose. He talks with me about the economy ... the State of the Union ... inflation ... the "cost" of stuff -- and how it affects him.
A year ago, he decided he wanted to get a part-time job (we said OK, as long as the grades stayed high). He's had that for two years ... is a conscientious worker ... has a bank account, a small credit card, and has saved nearly $4,000.
Joey is a really terrific kid ... a great son ... a good student (NH Society, in fact) ... who I love being around ... and who even treats my Mom (his grandmother) with kindness and respect. J
He's got a curious mind (like me .... and like YOU). He thinks about music, cars, sports (like all kids). But he's interested in business ... and is ESPECIALLY interested in our substack venture ... he figured out the dashboard, and every day he comes home from school, and looks to see how we're doing.
You can't put a price tag on that ...
Some of that, I grant you, is because of my career as a financial journalist, columnist and newsletter writer/editor/analyst/"guru" (whatever term you wish). He takes an interest in my work. And he's a bright kid.
Here's where we come back to your EXCELLENT question: What creates ... or what you you have to have to create ... generational wealth?
I wonder if Joey's "immersive" experience we shared has given him a view of money that isn't taught in schools (but should be), and isn't taught by most parents (but should be). I think he'll be smart with money ... smart enough to be part of a generational wealth "chain."
You know what I mean .. someone makes the fortune, and is smart enough to keep it once it's built. That gets passed to the next generation ... which (at the very least) has to be wise enough about money to manage/keep what they got. Even better would be a "next generation" investor who can add to that .... to be passed along to the NEXT (hopefully ready) generation.
That education/immersion/experience is what's needed ... to build ... to keep/manage ... and pass along a cache of cash that qualifies as "wealth."
Apologies for the long (and personal) response. I'm actually working on something for here on this ...
So ... let me ask YOU? What's YOUR response to YOUR question? Because I'm truly interested to hear your thoughts. Bill P.