Buy and hold - but not for too long

[Musicwhiz]

This "Buy and Hold - but not too long thread" is like having a lively discussion OUTSIDE the bear cave what's the best way to walk-up to the sleeping bear without getting mauled. Who can get the closest wins!

The way to survive a bear mauling is to invest conservatively and to rely on cash flows and dividends to see you through. Optimism is the enemy of the rational investor and the investor should actively seek to purchase securities in good and well-managed companies - hence he will often shun bull markets and embrace bear markets, as long as he has a viable and sustainable source of cash flow to see him through.

[orang]

For a moment, I was thinking what is EPL? What financial term is that?

Alamak! It's English Premier League.

This "Buy and Hold - but not too long thread" is like having a lively discussion OUTSIDE the bear cave what's the best way to walk-up to the sleeping bear without getting mauled. Who can get the closest wins!

The trouble is I don't even know whether the bear is in the cave! My biggest fear is that the cave is empty and for all I know, the bear is sneaking up behind me trying his best not to giggle!

Sorry, no prizes for guessing EPL correctly. However give some thought to what it entails to be an EPL Manager.

At least you know where the bear cave is. I don't. Anyway it looks like a friendly bear. Or the bear is in a happy mood and giggling now. Yah?

---

When i started investing in 1988, i adopted an investment principle of buying in the Bear market and selling in the Bull market. And i intend to follow this Bear/ Bull cycle of investing with my whole life. i called this my life's cycle investing. i have no choice because i am not smart at reading Company's Annual Reports. i also always have my doubts about GAAP type of Company's report. Companies have to much "freedom" in this accrual type of reports.
So i am not sure whether my investment style is considered "BUY & HOLD" or "HIT & RUN". i suppose it depends on the period of each BEAR/Bull cycle.
i only know this cycle is getting very much shorter, lately.
i am not sure, this is beneficial to me or not?

Please comment, we are all here to share.
Thanks.

Very focused. Very simple.
Maybe can name your style as UPHILL & DOWNHILL, yah?
Any landmarks along the way to indicate the momentum?

Landmark:-

Well, we all know most people consider the beginning of a Bear Market, when DOW JONES IDX. drops below 20% from the most recent high. i use to start average down when my current portfolio is only about 30-40% of my investment $fund. From experience, i always found i average down too early.
Now, i think i will start buying only from 25% - 30% onwards. i usually average down all the way till all my investment fund is used. And the proverbial falling knife still has some distance to fall.
This time, i am going to try average up. Or more accurate and picturesque-pyramid-up. Which most financial books recommend and disapprove of pyramid-down. Besides, pyramid up is "safer" :- 4-3-2-1 instead of 1-2-3-4. The tricky part is when to start pyramid-up.

The maths seem a bit tricky

I am inclined to read you always start to average when your portfolio is down about 60%. Does not seem right. Too drastic

Whether pyramid-up or pyramid-down you are still in a game of probables. How much is in your kitty is definitely accurate

Maybe you should put yourself in the shoes of a EPL manager and try a 4-4-2 or 4-3-3 system or some other tactics

I think you could a new thread - say, Uphill and Downhill - as this is a Buy and Hold thread. Not very appropriate. Then we can talk about riding uphill and downhill be it on a bicycle or a car

i start to average only when my portfolio balance is only 30%-40% of my investable fund. I mean i still have 60% of my fund to invest during a confirmed Bear Market. A stand-by fund.
And may i know where is the advantage of 4-4-2 or 4-3-3 over 4-3-2-1. pyramid-up averaging?

Hi Temperament,

I think I'll start a new thread. This thread is for serious Buy-and-Hold investors.

[Temperament]

This "Buy and Hold - but not too long thread" is like having a lively discussion OUTSIDE the bear cave what's the best way to walk-up to the sleeping bear without getting mauled. Who can get the closest wins!

The way to survive a bear mauling is to invest conservatively and to rely on cash flows and dividends to see you through. Optimism is the enemy of the rational investor and the investor should actively seek to purchase securities in good and well-managed companies - hence he will often shun bull markets and embrace bear markets, as long as he has a viable and sustainable source of cash flow to see him through.

Hi MW.
Very well put. Only remember in the Bull market, he will start to sell slowly. Not really shuns the market. Of course he will have to sacrifice some dividend income, after selling.
Then hopefully he will have sold enough shares and keep the cash for the next bear/black swan market.
You really need a lot of guts/faith to do this Bear/Bull cycle way of investing.
Try it then you know.
No use theory only.

[orang]

This "Buy and Hold - but not too long thread" is like having a lively discussion OUTSIDE the bear cave what's the best way to walk-up to the sleeping bear without getting mauled. Who can get the closest wins!

The way to survive a bear mauling is to invest conservatively and to rely on cash flows and dividends to see you through. Optimism is the enemy of the rational investor and the investor should actively seek to purchase securities in good and well-managed companies - hence he will often shun bull markets and embrace bear markets, as long as he has a viable and sustainable source of cash flow to see him through.

Hi MW.
Very well put. Only remember in the Bull market, he will start to sell slowly. Not really shuns the market. Of course he will have to sacrifice some dividend income, after selling.
Then hopefully he will have sold enough shares and keep the cash for the next bear/black swan market.
You really need a lot of guts/faith to do this Bear/Bull cycle way of investing.
Try it then you know.
No use theory only.

Quite amazing you could systematically sell in the run up. And without any emotional attachment to the stocks? An investrader?

Wow! What is the total returns like?

[Kalos_2]

I use to believe in Hold till death do us part. Well , not anymore. Better to buy a Balanced Fund or some Blue Chips during a Meltdown and then wait for market to run up again. Just need to wait for a couple of years.
Sell it off. And wait again. Not difficult to acheive 50% to 100% return. Needs patience to stay fully invested during downturn and to stay off the Stock Market when the market is toppish , bobbing up and down but no significant movements ( up or down ).

I think the next down movement is coming. This time , it will be Global , China and India included.

My 2 cents.

[Jared Seah]

Orang,

You win liao! Your Tao more power than mine.

I get your drift. The cave I looking at may be a fox cave afterall. LOL!

Here I am trying to sneak up to the bear, and the bear is sneaking up on me instead. That's why the bear is giggling at me. He can't wait to see the surprise on my face!

[orang]

Orang,

You win liao! Your Tao more power than mine.

I get your drift. The cave I looking at may be a fox cave afterall. LOL!

Here I am trying to sneak up to the bear, and the bear is sneaking up on me instead. That's why the bear is giggling at me. He can't wait to see the surprise on my face!

Who is winning?
You think the bear is giggling at you?
The bear is coming at me now!
or aiming for both of us?

---

Btw what is Tao?

[Jared Seah]

Thanks for putting my heart at rest

Peace be with you, fellow traveller of the Way.

[Temperament]

This "Buy and Hold - but not too long thread" is like having a lively discussion OUTSIDE the bear cave what's the best way to walk-up to the sleeping bear without getting mauled. Who can get the closest wins!

The way to survive a bear mauling is to invest conservatively and to rely on cash flows and dividends to see you through. Optimism is the enemy of the rational investor and the investor should actively seek to purchase securities in good and well-managed companies - hence he will often shun bull markets and embrace bear markets, as long as he has a viable and sustainable source of cash flow to see him through.

Hi MW.
Very well put. Only remember in the Bull market, he will start to sell slowly. Not really shuns the market. Of course he will have to sacrifice some dividend income, after selling.
Then hopefully he will have sold enough shares and keep the cash for the next bear/black swan market.
You really need a lot of guts/faith to do this Bear/Bull cycle way of investing.
Try it then you know.
No use theory only.

Quite amazing you could systematically sell in the run up. And without any emotional attachment to the stocks? An investrader?

Wow! What is the total returns like?

An investtrader? Is it a new word coined by you?
Let's say i have been investing for 23 years and still survive. No one no matter how much he knows about a stock can predict what the market going to do next. So after all your due deligence, you need something call "LUCK", God's Blessings"; it depends on what is your believe.
For me i believe in "GOD help those who help themselves" And of course ask for HIS BLESSINGS.
i am still very crazy about investing. becausei think i can survive so long is because i always try to let the market comes to me; no matter bear/bull or the worst, the black swan market.
i believe as i get more experience and older, i am much more better at letting the market comes to me.

[orang]

Hi Temperament,

Alamak You survived 23 years systematically buying and selling as you say....'let the market come to me' In plain words you invest and trade. And you no-talk like guru ya? Cannot call you sifu lah

Okay, I have a little problem and want to tompang your experience and success. Can?

My little problem - "know how to buy don't know how to sell". As a result my cash is still 8% of my portfolio (only equities) even as I hear the rumblings of bear! bear! bear! Actually never even reach 15%

So, two answers I like to hear from you.

First question is.....what is your present portfolio ratio to your investible funds? 50%?. This is only a one-time question just for comparison.

The other question is regarding your preferred choice of stocks or reason for buying stocks for your portfolio. I know for sure you do not buy strictly for dividends only.

Or do you categorise stocks by industries or into Blue chips, Growth stocks, Multi-bagger potential, Gems, S-chips etc etc

Maybe after your answers I an learn to run a little faster.

Oh, another thing. You talk about BLESSINGS. Can I ask whether you got give to charity part of your 'earnings'. I believe if you do you will be blessed! Ya?