Wednesday, May 06, 2009

 

What is long term in the equity markets?

Here is a wonderful question raised by Sridhar K, Owner at Learn From Sports Group in Linked In (www.linkedin.com)

http://www.linkedin.com/answers/financial-markets/equity-markets/MKT_EQU/471208-37949623

What is long term in the equity markets?

“Long term investment” is one of the very often used and very less understood term. Whenever someone speaks of long term, be it an investor or a fund manager, the only thing that comes to my mind is he has lost money as I feel ‘Long term is only when you are wrong in the short term’.

What is long term in your view.

My answer is no offense meant…longterm for me is like “etc”. Its a hard fact for every investors that the real meaning of long term is ‘Long term is only when you are wrong in the short term’. I’m a small investor thus maybe my thinking is not the same as the one who goes long term. But im in this business half my life so i have known and experienced my clients pain and gain. Long term is a no cut loss investment and involve justifying your mistake once your stock plummet by saying “im not worried, im in for the long haul”. How can we be sure that in 5 years time, our term investment can rake profits. We are no Warren Buffet whose pockets are way to deep to fathom. For most of us, we’re a one stock - buy investors. Meaning we buy one time and that’s it. Markets are dynamic and so complex nowadays. What is appealing in the 1930’s is not the same as today. Honestly, when i hold a seminar and somebody ask what is the best stock for the long term, i tell them humbly, “you pick one and i’ll say yes”. An analyst cannot go wrong in his calls, advising his clients what to buy for the long haul. and modesty aside, it’s the simplest question which even my 7-year old daughter can answer. NO offense meant.

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Comments:
your right, Its always long term when we fail on the short term.Why not long term with dividends?
 
For years (i lost count), bull or bear market, dividend wise, China Banking Corp (PSE: CHIB) never failed my clients. This is a double your money stock investment in 3 yrs or so. well, not until 2008. it's winning streak for so many years have come to past. The global financial breakdown did not spared the stock price of CHIB. The most widely held stock was dumped by foreign investors, as choice they have none. Massive margin call on a global scale was the cause of major sell off left and right, here and there, in all edges of the world.
 
Agree ako with China Bank. Dividend wise, its a very nice stock. Very consistent. Held it for several years :-)
 
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