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Buy and Hold Nonsense

Wall Street pretends that trading does not work. However, what they say and what they do is a different story. The truth is that no one really practices or uses buy and hold.

Joseph P. Kennedy, Bernard Baruch, Jesse Livermore, J.P. Morgan, John D. R Rockefeller and many more, from a previous era, George Soros, Paul Tudor Jones, Jimmy Rodgers, the Bass Brothers … and many more , from the present era, were market timers all. Either they buy stocks, currencies, bonds, commodities,, and gold when prices are depressed and sell them short when prices are high and buy them back after they decline.


 Try to compile a similar list of successful buy and hold investors … perhaps the only name will be Warren Buffett …


Far from being a simple investor whom anyone can emulate … Warren made his first millions running private investment partnerships for wealthy investors. After making them huge gains in the mid-1960’s bull market, he demonstrated exquisite market timing at the bull market peak in early 1969 by withdrawing from the market entirely, liquidating the partnerships …


He began by purchasing small private companies … which were bought with the intention of operating them as subsidiaries, giving rise to the myth that Buffett buys and holds all investments for the long term.


However, that’s not close to true. When it comes to Berkshire Hathaway’s investments in publicly traded stocks … virtually none have remained in its portfolio from one bull market to the next.  … Buffet just over the last few years, appears to have traded in and out of large positions in Solomon Bros., U.S. Air Group, McDonald’s, zero coupon bonds, and silver. He also apparently dumped significant holdings when the market began topping out in July 1998 since, by September, Berkshire Hathaway was holding a huge $9 billion in cash.


Source: Riding the Bull by Sy Hading





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