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Gordogato (79.34)

July 2011



Patience, Grasshopper

July 21, 2011 – Comments (8)

For anyone complaining that a stock they bought a few weeks or months ago has lost money, let me lend some personal perspective.

I have seven stocks in my portfolio with over 100% gains.  Without naming them, here are my holding periods:

#1 1100% gain, first purchased in 2007.
#2 550% gain, first purchased in 2004.
#3 400% gain, first purchased in 1999.
#4 160% gain, first purchased in 2010. (I got lucky once)
#5 140% gain, first purchased in 2008.
#6 140% gain, first purchased in 2002.
#7 140% gain, first purchased in 2008.

(I say "first purchased" because I tend to make many small purchases of companies, slowly cost averaging into them over months or years.  These dates are just when I bought my first lots.)

I can remember a time when four of those seven stocks were in the red (including #1 and #3), losing money in the months or years after I purchased them.  But I held onto them, believing in the underlying business, not the stock market's fickle sentiment.  Time and patience won out.

Have I had some big losers that my patience caused me to hold onto too long?  Sure, but none of them lost more than 100%.

The biggest gains are built up over years, not weeks or months.  All but one of the stocks I mentioned here were bought in 2008 or earlier (meaning before the "great recession" started), which just happens to be the front edge of the three to five year holding period that the Motley Fool writers keep mentioning.

Patience, Grasshopper.  [more]

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