How was your week?

[Lootman]

It's unsubstantiated garbage. Probably some obscure form of wind-up that the poster is fond of.

I praise both of you for your genius investing skill. My own experience is that I have had many shares and bonds end at a value of zero. And that's in a mere 20 years of investing. The statement wasn't garbage but my investing ability clearly is.

EDIT: Case in point, have just sold out a share which effectively has already gone to zero (lost 90% of its value) and I suspect is capable of losing another 80% in the near future. It's a fund BTW. As I say, crap investor.

That sounds unlucky. In 40 years of investing I have had just one security that went to zero. And that was an AIM share so I cannot declare that I did not know the risk.

So yes, some shares crash to zero, some bonds suffer a credit disaster. But not all of them, meaning that funds cannot really go to zero, unless leveraged and absent fraud.

These days I use stop losses on new positions and so cannot lose more than 10% to 15% or so on any bet. I let the winners run until the position becomes out-sized.

That said I am not a true LTBH investor. A 40 to 50 year timeline suits me.

[CryptoPlankton]

"Your claim that ultimately these income-IT's will be worth zero is a view that is not backed up by any performance-based metrics that I can find."

"It's unsubstantiated garbage. Probably some obscure form of wind-up that the poster is fond of."

I praise both of you for your genius investing skill. My own experience is that I have had many shares and bonds end at a value of zero. And that's in a mere 20 years of investing. The statement wasn't garbage but my investing ability clearly is.


GS
EDIT: Case in point, have just sold out a share which effectively has already gone to zero (lost 90% of its value) and I suspect is capable of losing another 80% in the near future. It's a fund BTW. As I say, crap investor.

No need to be so self-deprecating, I think we are comparing apples with oranges here. When I started out "investing" in the early days of the dot.com boom, I practiced far nearer to the speculative end of the investment spectrum. This resulted in widely differing results from multi-baggers to total wipeouts (several of them!). Being fortunate enough (and it was fortune, not skill, as I now realise) to come out of the crash in reasonably positive territory, I realised I needed a far more rigorous and sustainable strategy if I was to build up a portfolio that could sustain me later in life. This has progressed from a mix of "solid" high yielding large cap companies and "growthy" IT's (such as FCIT and PCT) to a greater concentration of IT's for both growth and dividends (with a few ETFs thrown in too). This has served me well (to the point where I have been drawing income for a few years now) and I can honestly say that not one of the "income-IT's" has ever remotely looked like approaching zero. In fact, having been lucky enough to avoid the likes of Carillion, I can't remember any of these companies failing completely. However, I have always continued to put aside a tiny fraction of my investments for more speculative shares (it keeps me away from casinos and the bookies), with the same old mixed results, including a couple of wipeouts.

And this is my point: it's about risk and reward. Quite frankly, investing in income IT's isn't ever going to set the world alight, but neither is it likely to make you broke. I admire people who are able to make superior returns by overcoming greater risk through skilful research. Inevitably, they will come a cropper from time to time, but if they can win overall then more power to their elbow. However, I know my limitations, and a steady LTBH (by which I mean very low churn, not hold forever come what may) has achieved all I wanted from equity investing. So, I would suggest LTBH (as described by others on this thread), clearly can work - it all depends on your investment goals...

CP

[tjh290633]

It's unsubstantiated garbage. Probably some obscure form of wind-up that the poster is fond of.

BoE

I praise both of you for your genius investing skill. My own experience is that I have had many shares and bonds end at a value of zero. And that's in a mere 20 years of investing. The statement wasn't garbage but my investing ability clearly is.


GS
EDIT: Case in point, have just sold out a share which effectively has already gone to zero (lost 90% of its value) and I suspect is capable of losing another 80% in the near future. It's a fund BTW. As I say, crap investor.

It does seem to be a case of poor share selection on your part. In the last 54 years I can count the shares which went bust on the fingers of one hand. Even so, I was able to avoid holding the shares at the point of going bust with the exception of Carillion. The first was Marconi, from which I escaped with a small profit. Mapeley lost a lot before being delisted, and I sold earlier.

I think those are the only ones, although I have sold other shares at a loss.

TJH

[Bubblesofearth]

I praise both of you for your genius investing skill. My own experience is that I have had many shares and bonds end at a value of zero. And that's in a mere 20 years of investing. The statement wasn't garbage but my investing ability clearly is.


GS
EDIT: Case in point, have just sold out a share which effectively has already gone to zero (lost 90% of its value) and I suspect is capable of losing another 80% in the near future. It's a fund BTW. As I say, crap investor.

Ah, the old goal-post change ploy

BoE

[88V8]

I praise both of you for your genius investing skill. My own experience is that I have had many shares and bonds end at a value of zero. And that's in a mere 20 years of investing. The statement wasn't garbage but my investing ability clearly is.

EDIT: Case in point, have just sold out a share which effectively has already gone to zero (lost 90% of its value) and I suspect is capable of losing another 80% in the near future. It's a fund BTW. As I say, crap investor.

Ah, the old goal-post change ploy

I think you'll find that there will be a gotcha

V8

[GoSeigen]

I praise both of you for your genius investing skill. My own experience is that I have had many shares and bonds end at a value of zero. And that's in a mere 20 years of investing. The statement wasn't garbage but my investing ability clearly is.


GS
EDIT: Case in point, have just sold out a share which effectively has already gone to zero (lost 90% of its value) and I suspect is capable of losing another 80% in the near future. It's a fund BTW. As I say, crap investor.

It does seem to be a case of poor share selection on your part. In the last 54 years I can count the shares which went bust on the fingers of one hand. Even so, I was able to avoid holding the shares at the point of going bust with the exception of Carillion. The first was Marconi, from which I escaped with a small profit. Mapeley lost a lot before being delisted, and I sold earlier.

I think those are the only ones, although I have sold other shares at a loss.

Oh my I've had so many. Biggest loss was a corporate bond, senior secured issue. Blew up in three months taking >£50,000 of my capital with it. Two or three other bonds succumbed in the aftershocks of the GFC. There are two or three crappy AIM companies. Carpetright got bought out at <10% of my initial purchase price IIRC -- that is zero in my book, at any rate it's more than 50 years compounding the current LT gilt yield just to get your money back. Others seem far more content with 90% losses. Petropavlovsk was the second largest Russian gold miner, once valued at £2bn, that is a big zero. Many of the UK and Irish banks, some of which I was shorting, went to zero or as good as in the GFC.

However the details are not important. The point was that contrary to some people's impression shares often blow up as do funds and even bonds. Assigning a final value of zero to them at infinity is completely fair in my view. When it comes to some businesses like mining companies I assume a zero valuation far earlier than that! Many bonds have no bullet payment. I think it's quite natural to think of investment cashflows as being finite and often ending at zero, especially as the time horizon lengthens. Yet apparently there is something dirty about anticipate this and taking avoiding action. Though I bet the same people wouldn't see sense in continuing to buy such a losing prospect. I also find it quite strange that they view LTBH as some pinnacle of investment zen, yet logically are unable to say how they would manage to purchase any shares if everyone else supported their view! To me it's completely natural for a market to be composed of both buyers and sellers. And if there are sellers why shouldn't I be one of them?

Bit of a ramble but frankly I don't have much time for the "never dumpers" as one might label them.


GS

[CryptoPlankton]

...Others seem far more content with 90% losses...

Are you being serious? I haven't seen a single comment suggesting such a thing.

...The point was that contrary to some people's impression shares often blow up...

All I have seen is people recount their own experiences. I have seen nothing to indicate anyone's impression of how frequently shares "blow up", and, anyway, have no idea what "often" means in this context?

...I also find it quite strange that they view LTBH as some pinnacle of investment zen, yet logically are unable to say how they would manage to purchase any shares if everyone else supported their view!...

This is indeed (as you yourself suggest at the end of your post) becoming "a bit of a ramble". I'm not sure you've bothered to read others' interpretations of LTBH, but I'm sure your hypothetical point is very clever. (The zen stuff is a bit silly though, isn't it?)

...To me it's completely natural for a market to be composed of both buyers and sellers. And if there are sellers why shouldn't I be one of them?...

Absolutely no reason at all, has anyone suggested otherwise?

...I don't have much time for the "never dumpers" as one might label them.
GS

I'm guessing "never dumpers" refers to people who buy shares with a view to holding them for a significant period (known as LTBH) rather than trading frequently? I have to say I'm finding it difficult to understand why you seem so exercised by the fact that other people can achieve satisfactory investment results with less sophisticated strategies than you. I certainly don't begrudge you what are presumably more stellar returns by being cleverer. But, the fact is, you don't have to be clever to make reasonable gains, you just have to be invested (VWRL anyone?). Is it that you think people without your knowledge and skills shouldn't benefit from the markets, and should just content themselves with whatever interest they can manage to glean on their cash?

Anyway, I hope you find your own zen, and good luck with your investments.

All the best, CP

[Itsallaguess]

I have to say I'm finding it difficult to understand why [some people] seem so exercised by the fact that [a LTBH approach] can achieve satisfactory investment results with less sophisticated strategies than [them].

I think I get it now CP, and it can all be clearly explained...

People often have completely irrational and baseless fears regarding certain other groups of people, and they sometimes make things up in their mind to justify their fear and dislike, because they think that if such groups proliferated, society as they know it would completely break down.

Yes, it's true - we're the Morris Dancers of investing...

:O)

Cheers,

Itsallaguess

[Bubblesofearth]

The point was that contrary to some people's impression shares often blow up as do funds and even bonds. Assigning a final value of zero to them at infinity is completely fair in my view.

GS

Yes, at the final heat death of the universe it's unlikely that more than a handful of companies will survive.

BoE

[Lootman]

The point was that contrary to some people's impression shares often blow up as do funds and even bonds. Assigning a final value of zero to them at infinity is completely fair in my view.

Yes, at the final heat death of the universe it's unlikely that more than a handful of companies will survive.

To be charitable I think that GS has a point. Not that all shares will go to zero in any non-trivial way. But rather if I had fixed my portfolio as it was 40 years ago, then I would have captured all the downside of "old economy" shares declining, but none of the upside of emerging companies.

So for example looking at the top ten US companies by wealth creation, I think only Berkshire Hathaway was around 50 years ago, and it was much smaller then.

The others are Apple (1980), MicroSoft (1986), Amazon (1997), Broadcom (1998), Nvidia (1999), Google (2004), Tesla (2010) and Facebook (2012).

[Bubblesofearth]

To be charitable I think that GS has a point. Not that all shares will go to zero in any non-trivial way. But rather if I had fixed my portfolio as it was 40 years ago, then I would have captured all the downside of "old economy" shares declining, but none of the upside of emerging companies.

So for example looking at the top ten US companies by wealth creation, I think only Berkshire Hathaway was around 50 years ago, and it was much smaller then.

The others are Apple (1980), MicroSoft (1986), Amazon (1997), Broadcom (1998), Nvidia (1999), Google (2004), Tesla (2010) and Facebook (2012).

Did you see my link earlier in this thread about the fate of the original Dow components? An investment in those companies would now be worth more than an equivalent investment in a US tracker.

BoE

[SalvorHardin]

To be charitable I think that GS has a point. Not that all shares will go to zero in any non-trivial way. But rather if I had fixed my portfolio as it was 40 years ago, then I would have captured all the downside of "old economy" shares declining, but none of the upside of emerging companies.

So for example looking at the top ten US companies by wealth creation, I think only Berkshire Hathaway was around 50 years ago, and it was much smaller then.

The others are Apple (1980), MicroSoft (1986), Amazon (1997), Broadcom (1998), Nvidia (1999), Google (2004), Tesla (2010) and Facebook (2012).

As the economist Herb Stein said, what has become known as Stein's law, "If something cannot go on forever, it will stop”.

https://en.m.wikipedia.org/wiki/Herbert_Stein

That said there are some old economy shares that have done very well over the long term. I just looked at one of my favourites, Union Pacific. Share price in January 1990 was about $6.30, currently $232.20. That's about 11.2% p.a. plus a dividend that's typically roughly 2% p.a.

And no-one working in their garage is going to design a piece of software that will replace a railroad, whereas many technology focused companies are constantly exposed to this sort of threat.

[Lootman]

To be charitable I think that GS has a point. Not that all shares will go to zero in any non-trivial way. But rather if I had fixed my portfolio as it was 40 years ago, then I would have captured all the downside of "old economy" shares declining, but none of the upside of emerging companies.

So for example looking at the top ten US companies by wealth creation, I think only Berkshire Hathaway was around 50 years ago, and it was much smaller then.

The others are Apple (1980), MicroSoft (1986), Amazon (1997), Broadcom (1998), Nvidia (1999), Google (2004), Tesla (2010) and Facebook (2012).

As the economist Herb Stein said, what has become known as Stein's law, "If something cannot go on forever, it will stop”.

https://en.m.wikipedia.org/wiki/Herbert_Stein

That said there are some old economy shares that have done very well over the long term. I just looked at one of my favourites, Union Pacific. Share price in January 1990 was about $6.30, currently $232.20. That's about 11.2% p.a. plus a dividend that's typically roughly 2% p.a.

And no-one working in their garage is going to design a piece of software that will replace a railroad, whereas many technology focused companies are constantly exposed to this sort of threat.

True although one reason US railroads have done well is new software that maximises utilisation rates for rolling stock.

But to be fair if you look at positions 10-20 in the S&P 500 it is full of "old" stocks like Visa, Mastercard, Costco, J&J, exxon, eli lilly, Home Depot and so on. It is the MAGA stocks that someone stuck in a 1980s time warp missed out on.

[ReformedCharacter]

The others are Apple (1980), MicroSoft (1986), Amazon (1997), Broadcom (1998), Nvidia (1999), Google (2004), Tesla (2010) and Facebook (2012).

MS was called Microsoft, even in 1986.

It was originally called Micro-Soft but the name was changed to Microsoft in 1979 by Billgates

RC