Comments on: I didn’t buy in order to sell.

By: Manshu

Manshu — Wed, 25 Feb 2009 02:58:39 +0000

Great point Dave. However, I don’t buy a TV to make money off of it, which is the very reason why one buys stocks.

By: Mike

Mike — Tue, 24 Feb 2009 14:34:40 +0000

Hi Dave.

That’s a great point. That does make it a lot harder to ignore fluctuations. It appears that second-by-second information (while wonderful in many cases) doesn’t come without a cost.

By: Dave

Dave — Tue, 24 Feb 2009 14:28:52 +0000

The main reason people are so obsessed with the value of their investments is that their value is updated on a second-by-second basis, in a very obvious and in-your-face way (unlike TVs, shirts, cell phones). This makes it much harder to ignore fluctuations (or gigantic drops) in value.

By: Mike

Mike — Tue, 24 Feb 2009 12:56:07 +0000

Hi Russ. I’ve always loved that quote as well. Thanks for bringing it up.

And I’m right there with you in terms of investing in funds rather than individual stocks. And like you said, the principle holds true there as well.

By: Russ

Russ — Tue, 24 Feb 2009 12:41:34 +0000

Great post, Mike.

It reminds me of a great Buffett quote, “If you understand how the company works, and you wish to purchase stock in it, imagine this scenario: As soon as you purchase the stock, the stock market closes for 5 years. This means that you will not be able to sell the stock for 5 years. If you are still comfortable with the purchase, then it is a good investment. If not, don’t buy it.”

I feel more comfortable with diversified, low-cost funds than with individual stocks, but the principle is the same.