11 July 2011

Why should I need to sell if my investment horizon is 50 years and above?

My friend asked me on the current market view. My answer to him is 'Why should I sell if my investment horizon is 50 years and above?'

Consider the following scenarios:

You are the business owner of a small business that co-own with Mr. Market. Everyday, Mr. Market will ask you to sell or buy according to his mood. Sometime, he is very optimistic of the future, and he is willing to buy at a higher price for your stake. Sometime, he is very pessimistic of the future, and he is willing to sell you at lower price for his stake.

We should always make use of Mr. Market's mood to gain the arbitrage profit from there. 

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4 comments:

  1. L. C. ChongJuly 11, 2011 at 3:59 PM

    I do not understand what you mean.

    ReplyDelete
  2. jack phangJuly 11, 2011 at 4:44 PM

    hi LC,

    In short, what I would like to tell my friend is that I would tend to hold it for a longer period and ignoring the market volatility for short term period.

    I would treat my investment as a long term business that it can last for at least 50 years and above.

    Hope it can clarify your doubt.

    Have a nice day.

    Regards,
    Jack

    ReplyDelete
  3. AnonymousJuly 14, 2011 at 11:03 AM

    hi jack,i know u r value investor,but please bear in mind ur company u invest may not last for 50 years,even a sound company may not last that long,and until then u lost all ur money..plz expand ur mind to read some other book like 'battle of investment survival' by gerald loeb.

    ReplyDelete
  4. Jack PhangJuly 14, 2011 at 3:55 PM

    Hi Anonymous,

    Oh I see. I do a portfolio rebalancing at least once a year. So no worries. I also do a quarterly report review on all my invested companies and the company in my watch list.

    Thank you for recommending me the book like 'battle of investment survival'. I will google it shortly. Do share with us more on your ideas of investment as this blog served to be a platform to share different opinions.

    Have a nice day.

    Regards,
    Jack

    ReplyDelete
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