- Kris said...
Buy and hold looks nice on people like Warren Buffet who has deep pockets.
The deep pockets issue is so rather risky.
In my flawed opinion, having a deep pocket does not guarantee one success in the stock market. One can buy and buy and buy and buy and buy as much as they want because they have a deep pocket.
But what is one really doing in reality?
Well for me, in my flawed opinion, they are only buying and buying and buying and buying more of the same stuff.
It has no relationship to whether the decision to buy the stock is correct or not in the first place.
Same with holding the stocks just because one have deep pockets. What's one doing? Me? I only see one holding a stock just because they have money. That's all. Again, it does not even say if their reasoning to buy and to hold the stock is correct.
And I am sure you know that if a stock selection is really bad, holding on to it for as long as possible or buying more, usually does not correct the initial mistake to buy the stock!
Warren's theory works because of supply and demand of the stock. He picks on companies with good earning visibility. As times go, good earning pushes up the demand for the stock and when he mops the shares from the market, he creates less supply. In a way, do you term this as "long term cornering"??
ReplyDeleteOur mistakes generally is not able to spot on the long term earning of the companies...partly because we are blinded with the share price movement and not able foretell whether we are dealing with crooks in the company's management.
Warren has his own way of picking stocks and he does not buy a stock because he has deep pockets.
ReplyDeleteEnd of the day, the reason to buy the stock is more important than having deep pockets.
yo dude,
ReplyDeletecan't agree more than this.
Hhc,
ReplyDeleteYeah, I just do not believe that being rich is a pre-requisite to do well in the stock market.
:/
How about those who not just having deep pocket but unlimited resources to able to print money yet more people still trust it have some magical value to solve any economic difficulties ?
ReplyDelete