I used to believe that one could research the hell out of a company then wait patiently until it’s stock price became a bargain and pounce buying up as much as possible.  The second part of my belief was to hold to eternity even passing on the stock to future generations. OK, a little far-fetched but really this is the hyperbole of ‘Buy and Hold’.  After investing for about a decade and a half I finally realized that if one intends to create wealth from stocks one must not only have the gumption to buy aggressively when others are selling but also the psychological fortitude to sell when others are buying.

 

  • This is the game of money and one should treat their personal wealth as a immortal and hungry organism constantly moving and seeking the best opportunities available.  The IMMORTAL part reminds us that the length of the game is much longer than our time on the planet, heck, even Warren Buffett at the age of 78 invests like he will live another 100 years.  The second part is to be HUNGRY and seek the best opportunities for survival and growth that are available at any moment of time.  
  • Right now I believe this is one of those times when one should move into stocks but when I say that I always mean Individual Stocks not the Market.  The opportunities exist in the stocks of select companies not the oscillations of the market although if one can time ‘the market’ successfully, wealth will be created.  This is survival of the fittest and remember fortunes are being established right now although they may not come to fruition for several years. 
  • A look at the DJIA Chart showing monthly values since 1900 does no justice to the real variability of the market (as measured by the DJIA) nor does it show the returns of the best-of-breed companies during each time period.  What this chart does show is that the century-long trend is steadily upward - wealth is created despite the seemingly destructive declines.  One interesting observation is that the declines (shown in white) are Deep and Narrow relative to the inclines.  Remember this, the market drops are dramatic and scary just as the subsequent rise back up is steep and typically higher than the previous high.
  • My advice to Self is to be Hungry and Think Immortality.  Everything will be just fine besides there are many more things in life much more important than money.  This is just a game but you might as well play to the best of your ability.

  Good Luck!    

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