Monday, November 24, 2008

To Have and Hold

Today, on TSC, Rev Shark and Rothbort were pissing at each other in the Columnist Conversation. The topic for debate was "Should people buy-and-hold, or not?" Both gentlemen brought their grandchildren into the fray. It was not pretty.

My opinion is that we all buy and hold. The difference is in the way you qualify the hold part.

Minnie Pearl told the story about the old boy who wandered into the blacksmith's barn and picked up a horseshoe, still warm from the forge. Well, he laid it back down in a hurry.

The blacksmith laughed and said, "Burned your fool hand, didn't it?"

And the old boy said, "Naw, it just don't take me long to look at a horseshoe."

By this exemplar, I argue that Rev Shark, himself, buys and holds. He just doesn't hold it long.

Myself, I'm a little bit country and a little bit Rock'N'Roll. I do a little of both, which has been my undoing on several occasions this year.

I have bought and sold GOOG repeatedly. I won't tell you where that's gotten me. I'll just say that I would be far better off if I had never sold a single share of it.

During the 2000 crash, I never sold anything and lost 40%, but by 2004, I had made it back. Without doing anything.

This year, I have been selling with a vengeance. Lately, at the wrong times. Even though I have held substantial amounts of cash this year, I'm still down 35%, with no confidence that I'm going to ride it back up again.

The worst thing is, my financial advisor was right. He told me this would happen.

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