7/21/2005

Market notes: Why is the market sort of blah even though all data is positive including earnings? In a nutshell: speculation and broker commissions that encourage same. Anybody who buys today with the intention of just selling when the stock goes higher is a speculator. Period. And here's the really funny part: long term players dominate every market both stock and futures. You should always stay in a stock that is paying good dividends and hasn't plunged below your bailout point, and if you scale out as the stock rises (sell some) your effective buy in price is lowered and your rate of return on investment rises. Every tout on TV is simply that, a race track tout on the con. Those of you who watch Cramer, a guy who happens to be actually good, are watching the penultimate tout. The big reasons that the two most successful investors of our generation, Peter Lynch (the original Fidelity guy) and Warren Buffet are successful is that both are long term players. What we have in the "markets" is a billion casino gamblers looking for the quick hit; all will lose eventually. I know a lady who bought Exxon around 25 years ago and has never touched it while it has split at least ten times and been involved in two buy outs. She has seen her holdings increase in value twenty fold NOT COUNTING DIVIDENDS. Her effective buy in price after all this is about a dollar. Have there been sell signals along the way? You betcha, but she was stupid and hung on.

No comments: