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Thread: Buy and hold? Not for me.

  1. #21
    Senior Member kcowan's Avatar
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    For me, a B&H stock has some specific properties:
    - a history of regular dividend increases
    - healthy earnings coverage of their dividend
    - operating in a sector that supports continued profits
    If any any of these indicators stops looking good, they go on a watch list until they turn around (2 quarters), or they get sold. This review happens once a year at rebalance time.


  2. #22
    Senior Member Argonaut's Avatar
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    Part of the reason this didn't work well is that it was a paper account. Contrary to some of the noise out there, I think real money on the line lets people make better investing decisions. Like Rusty said, he didn't bother looking at the portfolio for 2.5 years. I remember one time I was in a paper trading competition and made the right call on some put options. I didn't even bother cashing in the trades though because I had better things to do with my time. You can bet if I had real money on the line I would have been online at market open.

    Also a note for people looking at this thread, USO doesn't track the price of oil properly and should never be bought ever, much less for a buy and hold investment. The other two choices had obvious problems with them, and the investor would have realized it faster with real money and tried something else.

  3. #23
    Senior Member olivaw's Avatar
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    IMO, You can buy and hold individual stocks but you need to constantly watch them for signs of trouble.

    I prefer broad based index ETFs. They can be ignored indefinitely.
    If you have something to say - then say.

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  5. #24
    Senior Member My Own Advisor's Avatar
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    Quote Originally Posted by olivaw View Post
    IMO, You can buy and hold individual stocks but you need to constantly watch them for signs of trouble.

    I prefer broad based index ETFs. They can be ignored indefinitely.
    Yes and no I think. You will still need to consider your asset allocation, when to buy more, when to sell as part of total return to income approach, and other factors.

    The biggest difference between a basket of individual stocks (concentration) and many stocks inside an ETF/fund is diversification - the same thought process should apply.

    I meant to add, besides, I don't believe there is a such a thing as a perfect portfolio. Great results by many index investors only exist in hindsight because they didn't tinker with their portfolio very much (behaviour) and they manged to invest at a great time (more behaviour). What will be is what will be, individual stocks or otherwise holding hundreds of them for a small fee.
    Last edited by My Own Advisor; 2017-05-09 at 12:28 PM.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  6. #25
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    With me, I don't look at balancing my portfolio, I don't look at asset allocation. I look for things I know and understand when they are on sale.

    I do look at the big picture of my holdings, looking for signs that something has changed in the landscape or with the company...for example, Yellow pages has been in a dying market for decades (not even sure if they still exist as a company, but I remember someone telling me to get in on it when it was low), and has no hope of surviving long term...back before the internet though, they may have been a good company to hold. If I'd held them and saw the early days of the internet, I probably would have sold had things stayed the same with their market, I probably would have held.

    The reason I don't worry about a balanced portfolio or my allocation is I never understood the idea of selling your winners because they were doing too well. That was just silly to me. If they do well, and nothing on the horizon says that's likely to change, I'm not going to worry that immmaking too much money in one area.

    Then again, I don't look at my assets by their current value. I only know what they're worth when I sell, everything else is just on paper, I don't get excited about on paper wealth. I care about how much they cost me, how much they put in my pocket (dividends) and that's about it...much like real estate. Paper wealth just inflates one's ego, but it can always disappear overnight.

    When I buy investments, I consider that spent money, as in gone forever. If I'm wrong, and it's worth more in the future great. If I'm not, I don't lose sleep over it and I don't wonder how I'm going to make ends meet going forward.
    I'm not JustAGuy (without spaces), or Donald, or <insert name here>.

  7. #26
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    Laidlaw was a great div cash cow. The bought ambulance service and Grey Hound bus. The guy in charge of ambulance division said he didn't know there was so many regulations to the biz. Greyhound guy didn't know bus travel was declining. Nobody went to jail they just went broke.

    So mindless hold not option.

  8. #27
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    Quote Originally Posted by My Own Advisor View Post
    Great results by many index investors only exist in hindsight because they didn't tinker with their portfolio very much (behaviour) and they manged to invest at a great time (more behaviour). What will be is what will be, individual stocks or otherwise holding hundreds of them for a small fee.
    - Behaviour is important. Very true.
    - Timing - not important. Trying to time is the exact opposite of correct behaviour. Timing reduces returns. Doesn't matter when you start to index, the returns will be good - over the long term. That's what the theory is all about. The whole point of couch potato is that you do NOT attempt to time the market.

  9. #28
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    you guys make me laugh.

    Read one stupid thing and repeat.

  10. #29
    Senior Member humble_pie's Avatar
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    Quote Originally Posted by olivaw View Post
    IMO, You can buy and hold individual stocks but you need to constantly watch them for signs of trouble.

    I prefer broad based index ETFs. They can be ignored indefinitely.

    disagree about "constantly" watching the stocks. In canadian stocks, most folks should be holding the same big/old/stable companies as the indexes.

    there are people who preach - even in cmf forum - that individual stock holders need to spend their days, nay even their nights as well, analyzing all the financial statements of their holdings.

    me i think that is a ridiculous idea. There are armies of talented, skilled CFA analysts out there who do this kind of work on a professional basis. Then there are squadrons of talented, skilled finance journalists who will routinely interview & report on what these analysts are saying. Literally an hour after earnings news comes out, the journos have got full stories online, with a plethora of commentaries.

    ordinary investors only need to read the news. Enough news to pick up the range of professional opinion, all the way from view A to view Z. Everything will be there, in the news.

    why would an ordinary investor think he can invent a better financial analytic wheel, when he's not even trained in the sector?

    take canadian banks. Everybody owns canadian bank shares, even if only through their eventual interest in the canada pension plan. Nobody understands, from banks' audited financial statements, much of what a big canadian bank is up to. From an avalanche of media reports, though, an investor can pick up a range of insights. He will find a spectrum of analysts suggesting - each analyst providing serious, lucid, cogent reasons for his choice - everything from Dump Banks to Buy Banks Aggressively on Drops.

    same thing for telcos, oilcos, utilities. More than enough information proliferates in the media. No need to re-invent the wheel.

    as for the small caps, here relying on anybody gets dodgy. Here i think an investor would do better with a QQQ or a russell 2000 ETF, or a mutual fund with an outstanding history of specializing in small caps.

    .

  11. #30
    Senior Member humble_pie's Avatar
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    Quote Originally Posted by lonewolf :) View Post
    ... stocks eventually go to zero

    i think i'll make this my next signature line

    .


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