Make Your Own Decisions
Don't you just wish someone would tell you if you should buy, sell, or hold a given stock? We all do. But letting other people make your investing decisions for you is a dangerous game. So is panicking when the market heads south.
By Barbara Eisner Bayer (TMF Venus) and Ann Coleman (TMF AnnC)
October 17, 2000
Let's go back to The Motley Fool mail bag like we did last week. That was fun, and the questions just don't stop coming! This first one was practically off the screen before we could catch it to answer.
"Complications with CG coming up in late October. THC has had a nice run-up. Take the $ and run? Uncertainty in industry going forward, take BHI off the table? Or should I hold?"
Yes, buy! No, wait... sell! Hang on... hold! On second thought... why are you asking me, a total stranger? It's just a feeling, but do you watch a lot of financial TV shows?
The swift-lipped Wise have trained investors to expect "recommendations" issued at the speed of sound, but we Fools just aren't that smart. There are thousands of stocks out there. We might have opinions about some of them, which we gladly share, but we are hardly experts on all of them (not that inexpertness stops others from issuing recommendations like our local meter maids issue parking tickets).
Heck, I'd love to have someone tell me what to buy and when to sell. Preferably someone who is always right. But I know that you aren't planning to blindly follow everything I say. You're just looking for "input," right?
Input is great, but when you sound like you're looking for answers, I get worried. If you don't think you are capable of deciding what to do with your stocks yourself, what in the world are you doing investing in them? OK, having got that off my chest, the working hypotheses here is that you are just looking for input -- opinions and facts to help inform your own opinion.
The best place for input would be on our stock discussion boards where you can get multiple opinions and even conflicting input. You want conflicting input. That way you have to sort out for yourself what you think will happen with this stock, which forces you to do some serious thinking. It wouldn't hurt to read all of the company's recent news releases and financial statements, either. The hard stuff. The stuff that pays off for serious investors.
Switching to decaf might help, too. Just a suggestion!
"Today I looked at all the Fool postings and I was amazed that there was no mention of the serious dive the Nasdaq is taking. And please don't use the 'we're in it for the long term' disclaimer. Your ostrich approach to the present market is making your financial information increasingly irrelevant. I suppose you're still into Celera long. Whatever. You guys seem to be blissfully disconnected. Fool on."
Ostrich approach? Why, thank you!
Ostriches have been around for 120 million years. I'd call that long-term, all right. Fully grown ostriches have one of the most advanced immune systems known to mankind, the type needed to be emotionally immune to current market turbulence -- and the email it generates.
The only place we Fools bury our heads is deep down in a company's fundamentals. Look, we're not naive. We've always expected that during the course of our investing career, we'd encounter bear markets. But we're not going to whine and panic when the bear attacks. For us, it's business as usual.
Buying excellent companies based on strong fundamentals and holding for the long term is even more essential in a bear market. Too many investors have no idea what their companies are really worth. When the bear roars they sell their companies either at a loss, or for a whole lot less money than they would have gotten if they'd just sat tight for a while. This is smart? They run around like a chicken with its head cut off, flapping frantically and getting nowhere.
You suppose correctly that the Rule Breaker Portfolio is still holding Celera Genomics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CRA)") else Response.Write("(NYSE: CRA)") end if %>, and will continue to do so over the long term. That baby's gonna do great things. Celera's up 69% in the 10 months since the Fool bought it.
Yeah, we could have sold when it was up 500% last winter on euphoria alone, and we could have bought it back later when the honeymoon was over. Great plan in hindsight. But that kind of frantic investing doesn't work as well for us over the long run as patience. There are too many opportunities to do the wrong thing, especially for those who get spooked by market downturns. There's nothing we can do if the market decides to go crazy about a stock -- in either direction. Our focus is on what the company will do in 10 years.
Bottom line, consider the immediate future of the ostrich with his head in the sand vs. the chicken with his head cut off.
