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Gordogato (82.49)

Patience, Grasshopper

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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.

8 Comments – Post Your Own

#1) On July 21, 2011 at 10:05 PM, truthisntstupid (78.94) wrote:

Great post! 

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#2) On July 21, 2011 at 10:14 PM, dragonLZ (88.15) wrote:

Agreed.

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#3) On July 21, 2011 at 10:27 PM, Momentum21 (95.71) wrote:

Yes. Congrats to you! 

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#4) On July 21, 2011 at 11:17 PM, HarryCaraysGhost (84.01) wrote:

Young Grasshopper snatches pebble from Masters hand!

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#5) On July 21, 2011 at 11:23 PM, shadowromantic (< 20) wrote:

Well said. Long term investing can work very nicely, especially when things look the worst. I made some of my best purchases during the 2008 crisis. To be honest, I'm only getting frustrated now that everything is so high.

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#6) On July 21, 2011 at 11:23 PM, TSIF (99.98) wrote:

Good stuff....glad none of your investments lost you more than 100%, I really hate when that happens, but I should know better than to use the mafia's money!  ;)

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#7) On July 22, 2011 at 11:59 AM, leohaas (30.06) wrote:

Congrats! Feel free to name those stocks, and tell us why you think they are still good.

"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%."

Ha Ha Ha! Very funny indeed.

But a 100% gain cannot be compared to a 100% loss. If you'd like to make a fair comparison, let us know how many times you were 50% down.

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#8) On July 22, 2011 at 3:16 PM, dwot (28.89) wrote:

leohaas,

I believe I get at what you are saying, but if you have about the same amount of money in each stock a 100% gain on one cancels 100% loss on another.

It is when you aren't using the same starting point that they can't be compared, ie, a 50% gain after a 50% loss is not a full recovery... 

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