On Thu, 03 Mar 2011 13:09:14 -0500, wrote:

On Thu, 3 Mar 2011 07:20:56 -0500, BAR wrote:

You could have almost tripled your money in 10 years with buy and
hold, much more if you'd traded around the dips.

"traded around the dips" oh man, that's rich.

You sound like a day trader.

It's called market timing and it is a bad ivestment strategy.


Yeah that is how Warren Buffett lost his ass in the market.

It's hard to argue with Warren isn't it. One of the things that I do
faithfully every year is to read his annual letter to the Berkshire
stockholders cover to cover. There are always some little gems and
nuggets of wisdom in there. One thing that caught my eye this year
is how he picks investment managers:

====
It’s easy to identify many investment managers with great recent
records. But past results, though
important, do not suffice when prospective performance is being
judged. How the record has been achieved is
crucial, as is the manager’s understanding of, and sensitivity to,
risk (which in no way should be measured by
beta, the choice of too many academics). In respect to the risk
criterion, we were looking for someone with a
hard-to-evaluate skill: the ability to anticipate the effects of
economic scenarios not previously observed.
=====

http://www.berkshirehathaway.com/letters/2010ltr.pdf

That statement sort of mirrors my own investment philosophy which is
to try and gather a macro level understanding of what economic trends
are in play, what is the likely outcome, and what companies will
benefit, or not. Easier said than done of course, and it demands
flexibility as situations change. That is different from market
timing although there is some relationship.

My youngest son had an opportunity to meet with Warren Buffet during
his senior year at B-school. Here's a picture of the two of them in
Omaha:

http://img130.imageshack.us/img130/3...rrenbuffet.jpg