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.
