Tuesday, February 20, 2018



The five stages of death are denial, anger, bargaining, depression and finally, acceptance. We bring it up, because right now, Wall Street is really struggling with that last one, acceptance. We’re talking about the death of that time honored investment strategy, buy-and-hold. Investors just can't let go, and they need to. Read More…



If you hold onto an investment for longer than five days, consider yourself the new millennium's version of Benjamin Graham. The average holding period for the S&P 500 SPDR (SPY), the ETF which tracks the benchmark for U.S. stocks, is less than five days, according to shocking statistics in analyst Alan Newman's latest Crosscurrents newsletter. Read More…


The conventional advice retail investors received from the financial advisors over the last several decades was to “buy and hold” good-quality stocks, bonds and mutual funds.
This strategy, we were told, would finance our kids’ college educations and our retirement.
Now, it seems that “buy and hold” is just for suckers.
Such investors are sitting ducks for the new breed of “high frequency” traders, the nefarious “dark pools” and Wall Street firms who use retail investors as dumping grounds for their dubious products and shares. Read More…


I’m losing patience with financial rules of thumb especially the tried and true concepts of “Buy & Hold” and infamous “Buy Low & Sell High.” Not only does the “Buy & Hold” concept lack relevance in today’s markets but technically you can’t apply both a “Buy & Hold” strategy with a “Buy Low & Sell High” approach. Read More…


In its August 14, 2000, issue, Fortune went out on a limb with an article titled “10 Stocks to Last the Decade.” The story described a “buy and forget” portfolio meant to capitalize on overarching trends the magazine predicted would dominate the next ten years. It recommended two companies in each of four categories -- media (Viacom, Univision), finance (Charles Schwab, Morgan Stanley), technology (Broadcom, Oracle) and telecommunications (Nokia, Nortel) -- as well as Genentech and, ahem, Enron. Read More…


One of my favorite academics to follow is Dr. Andrew Lo. His adaptive market hypothesis is one of the best papers on stock markets and investor success I have ever read. He tells us that markets adapt and the forces of evolution and natural selection apply to market returns just as they do to the rest of the world. Investment styles come and go so investors must adapt to succeed according to Lo. At the end of the day, the ultimate job of a long-term investor is to survive. That makes a lot of sense to me. One of the reason I favor the deep value and distressed approach to markets is that it reduces the risk of permanent loss of capital and helps ensure survival. Read More…


CNBC, Market Watch, Forbes, Kiplinger, Wall Street Journal, CNN Money, The Street, Mark Cuban and others say that buy and hold is dead.
Lubos Pastor of the University of Chicago Booth School of Business and his colleagues have recently documented that buy and hold may never have been a viable investment strategy.
Wall Street Journal columnist Brett Arends wrote in 2010:
For years, the investment industry has tried to scare clients into staying fully invested in the stock market at all times, no matter how high stocks go…. It’s hooey…. They’re leaving out more than half the story. Read More...


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