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catoismymotor (< 20)

Investing & Try A Little Tenderness

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July 30, 2010 – Comments (5) | RELATED TICKERS: BRK-A , L , LUK

Investing & Try A Little Tenderness

  

“What the heck is Cato going on about?”, I hear you say. Well, last night I was thinking about the Long Term Buy and Hold (LTBH) investing style. I like it. I use it. I think it is successful and will continue to be no matter how the market behaves. “You’re full of non-sense.” I hear from the very back of the class. Ah, but I am not buying *the market*. I am buying stocks. “But market fluctuations will affect and effect your picks!” you say, “In order to make any money you need to buy low and sell high, all the time!” I say you are thinking like a *trader* not an *investor*. Ninety-nine percent of all traders loose money, or so I have been lead to believe.

  

Initially when I started buying stocks I was thinking like a trader. Boy, I paid more tuition to The School of Life Lessons than I really care to dwell on. Fees, taxes, novice errors all combined to bite me. Since that time I have licked my wounds, read a ton, made sure to understand what I read and have done a 180 degree turn in my approach to gaining wealth. I still have a small account I use for trading since the Green-eyed Monster still lives within me. He needs to be fed now and again. But the activities in that account are entirely different than in the ones that matter: my retirement accounts. If you are truly serious about INVESTING I recommend the Intelligent Investor by Benjamin Graham and One Up On Wall Street by Peter Lynch. I have developed a strategy that uses most of the approaches suggest by each of them to do really well.

  

Think back to when you were a child. Do you remember the story of the Tortoise and the Hare? Yep, the Tortoise wins the race. But I don’t see my approach as being entirely like the Tortoise. I think of my way of doing things as more like a locomotive engineer: You couple all your cars (stocks/funds/bonds) together behind your engine (account). As time passes and distance is covered you add coal (money) to the engine to keep it going and progressing. Along the way you may need to drop a car (stock), pick up a new one, coast for a while (set money aside to buy) or feed the furnace (buy on the dips) with great vigor. Once your investment train has built momentum it has the ability to keep moving without great effort from you.

  

In closing I would like to suggest you listen to a song I have linked to. It is Otis Redding’s Try A Little Tenderness. The song reminds me of my train analogy above: It starts off slow but builds and builds to full glory behind the voice of Mr. Redding, one of Motown’s best.

  

I hope you all have a good evening. I’ll be busy with shooting a rehearsal and rehearsal dinner tonight plus the pre-wedding, wedding, and reception tomorrow evening. Oy! And no, I am not shooting Chelsea’s wedding. May God help those photographers!

  

Cato

5 Comments – Post Your Own

#1) On July 30, 2010 at 11:09 AM, lemoneater (77.63) wrote:

Liked the train analogy. I just unhitched some ZMH and DD and added some VZ and TSCDY.

Have a good wedding shoot!

If I had known you 11 years ago, I probably would have had you do mine:)

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#2) On July 30, 2010 at 3:30 PM, ChrisGraley (29.84) wrote:

I prefer just to beat the contrarians with clubs.

It might not help the bottom line, but it sure is fun.

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#3) On July 30, 2010 at 4:03 PM, catoismymotor (< 20) wrote:

Lemon,

If I had been in the business 11 years ago it would have been my pleasure. And thank you. The bride is a sweetie and her mom is nice so hopefully the evening should go smoothly.

 

Chris,

Play nice. I like to feed them peyote the abandon them on the subway.

 

Cato

 

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#4) On July 30, 2010 at 8:44 PM, goalie37 (92.05) wrote:

Dang CAPS players.  All the posts today have been intelligent and well thought out.  A whole day with nothing for me to say but "Good post."  Oh well, there's always tomorrow.

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#5) On July 31, 2010 at 5:01 PM, catoismymotor (< 20) wrote:

Umm...Thanks goalie37? :)

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