Buy and Hold, Buy and Forget, or Buy and Regret??
April 15th, 2010
The debate rages on. The rise in stock this past year has caused the buy and hold folks to peak up from their gopher holes. They are once again touting their strategy (or is it the ultimate lack of strategy?). So, knowing that buying and holding the S&P 500 for the past decade was a very poor strategy, I decided to look back on an even more humorous concept, The Money Magazine list of 10 stocks to “buy and forget” for the last decade that they published in 2000. A quick look at how we fared by buying and forgetting:
Stock Price in 2000 Price 12/31/2009
Nokia $54 $12.85
Enron $73 AARGH!!
Nortel $77 $.002 (Wow!)
Oracle $74 $24.53
Broadcom $237 $31.47
Viacom $69 $31.50
Univision $113 *(36.25)
Charles Schwab $36 $18.82
Morgan Stanley Dean Witter $89 **$29.60
Genentech $150 ***(95.00)
- *Purchased by Broadcasting Media Partners in April, 2007 for $36.25 per share
- **Does not include value of Discover spinoff (not enough to avoid losing $$)
- ***Purchased by Roche in March 2009 at $95 per share
So, our version of the old joke- How do you become a millionaire investor? Subscribe to Money Magazine, cling to the buy and hold philosophy through thick and thin, have a 10 year time horizon, and……start with at least $4 million dollars!!!
Maybe take those buy and hold recommendations with a grain of salt???
