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01-12-2013, 08:25 PM
John Train (author of Money Masters of Our Time) offered some differences between Long-Term Investor and Relentless-Pursuit Trader.
Long-Term Investor
1. Trust to the magic of quiet long-term compounding
2. Stay with long-term trends
3. Buy for the long-term
4. Ride through minor setbacks
5. If the price becomes excessive, wait for the earnings to catch up
6. Give preference to existing holdings that you are familiar with
7. Put your eggs in one basket
8. Develop a congenial investment philosophy and stick to it
9. Know everything about a few big things
10. Develop helpful rules and formulas
11. Understand each company intimately
12. Know management intimately
13. Don't be too concerned about the exact price you pay or receive: over a five- or ten-year holding period it should be unimportant
Contrast the above with the Relentless-Pursuit Trader
1. Force the pace
2. Catch changes early
3. Buy and sell constantly
4. Sell on possible adverse developments
5. Sell if the stock gets ahead of itself
6. Comparison-shop ruthlessly
7. Diversify extensively
8. Have no prejudices
9. Know about many things
10. Avoid formulas
11. Buy batches of companies that together represent a thesis
12. Don't worry much about management
13. Be very conscious of price in both buying and selling: Multiplied by many transactions it is critical
Relentless pursuit is constantly scanning for new stock to pick off for limited moves, rather than as long term commitments. Examples of investors who used this style include Peter Lynch, Michael Steinhardt, and Robert Wilson.
The author also categorised Warren Buffett, Philip Fisher, T Rowe Price, and Ralph Wanger as the traditional long-term style.
Long-Term Investor
1. Trust to the magic of quiet long-term compounding
2. Stay with long-term trends
3. Buy for the long-term
4. Ride through minor setbacks
5. If the price becomes excessive, wait for the earnings to catch up
6. Give preference to existing holdings that you are familiar with
7. Put your eggs in one basket
8. Develop a congenial investment philosophy and stick to it
9. Know everything about a few big things
10. Develop helpful rules and formulas
11. Understand each company intimately
12. Know management intimately
13. Don't be too concerned about the exact price you pay or receive: over a five- or ten-year holding period it should be unimportant
Contrast the above with the Relentless-Pursuit Trader
1. Force the pace
2. Catch changes early
3. Buy and sell constantly
4. Sell on possible adverse developments
5. Sell if the stock gets ahead of itself
6. Comparison-shop ruthlessly
7. Diversify extensively
8. Have no prejudices
9. Know about many things
10. Avoid formulas
11. Buy batches of companies that together represent a thesis
12. Don't worry much about management
13. Be very conscious of price in both buying and selling: Multiplied by many transactions it is critical
Relentless pursuit is constantly scanning for new stock to pick off for limited moves, rather than as long term commitments. Examples of investors who used this style include Peter Lynch, Michael Steinhardt, and Robert Wilson.
The author also categorised Warren Buffett, Philip Fisher, T Rowe Price, and Ralph Wanger as the traditional long-term style.
A stock well bought is half sold - Ben Graham
Price is the most important factor to use in relation to value - Walter Schloss
Price is the most important factor to use in relation to value - Walter Schloss