I'm watching CNBC and this old dude says buy and hold doesn't work.

I also read somewhere about the 10% rule: you always sell when you lose 10% on one stock.

Should I follow these two advice?

 

I remember the 10% rule f*cked a lot of people over this one time.

 

Rich,

I know Motley Fool has made a few questionable choices, but I think their basic advice--to carefully research the company's financial reports, etc.--is sound. If you haven't checked out their site, do so at http://www.fool.com/index.htm

cal

 

Don't buy stocks at all; invest in after-market S2000 performance parts. Much more satisfying.

 

I'll have to agree on this one, especially if you invest in the parts we carry

 

Where is PINKY when we need him

 

I follow the rule that if the stock price falls by 10% I double my holdings in it. It then only needs to rise by 5% for me to be even!!

I am just about to sell the S2000 to cover my losses, but it did sound like a good idea at the time j/k

 

[QUOTE]Originally posted by tokyo_james
[B]I follow the rule that if the stock price falls by 10% I double my holdings in it.

 

The market sucks right now. If you really don't believe buy and hold works anymore, how do you explain someone like Warren Buffet. Of course the key is knowing when to bail out and sell. However, my motto lately has been buy high and sell low

 

Sigh.... The dumb-assed talking head 'analysts' of today are simply too focused on th last 3 years to see that their heads are up their asses. Buy and hold does work - an analysis of every index, stock fund, and individual stock will bear out that fact. The problem is, buy and hold doesn't mean 6 months, or even 2-3 years - it's a long term strategy. The only time buy and hold doesn't pan out well is in the rare case of a bubble economy - which we just went through.

If you happened to buy right before the bubble burst, and the company hasn't gone out of business, you may not make up your 80% loss in 10 years. Then again, with an 11% growth rate, you might... Think about this though - if you bought any of the big bubble stocks (Cisco, Intel, MS, etc) _before_ they went through the roof, and held them until now, you'd still be ahead on the vast majority of them.

And someone already mentioned Buffett... Seen what a class A share of Berkshire Hathaway is worth today? 10 years ago it was about $9,500, today it's $69,500 with a 52 week range of 54k - 74k. Remarkably stable, no?