Thursday, October 4, 2007

Tortoise vs Hare: Missed opportunities of a short term view

It never ceases to amaze me how truly stupid some people are.

I'm talking about those investors who continue to bag long-term investors like me who don't have instant spectacular profits and have a view of investing longer than the space between their brain and their finger poised on the sell key on their computer.

True, money can be made short term, I have done it myself, but real long-term returns come after investing for years, certainly longer than 5 but hopefully much longer.

This is also true of property, bank deposits and direct business owning investments.

These profits come from dividend returns and buying more of good companies you already own should their market prices dip from day to day.

It is impossible to compare the long vs short-term investing because, hello, the short term profit is apparent very quickly and you have to wait for the long!

Those nervous Nellie's who sell because a company has a bad year or think they can beat every other sucker who is after a fast buck are fooling themselves if they don't fully know what they are doing.

Making your online broker rich by constantly trading isn't going to make you wealthy either.

In my current portfolio of 12 stocks 3 of them are currently under some sort of merger or takeover process.

I mention this because I was advised by a gaggle of short-termers to dump stock in the very 3 stocks that could be bought because the stock prices of these companies were going down!

One mental defective who has badgered me over holding Sky City Entertainment (SKC) for some time and so much of it, emailed me again about a month or so ago and told me I was "overweight" with this stock. Well na, na, na, na, SKC is now being looked over by buyers.

The Warehouse(WHS) is looking like it is going to be bought by one of 3 possible buyers after a Commerce Commission hearing this month.

I was told to sell up and run for the hills when they had problems some years back.

WHS is now doing much better and should get a good price when sold, thank you very much.

Auckland International Airport (AIA) is also under the sellers hammer.

Being short-termers though they cant appreciate or lack the knowledge that one day someone else is going to be interested in what you have(unless it is actually a turkey of course) and to hold like I do opens one up to the possibilities of a buyer for your share of the business.

Holding long-term of course opens up the inevitability that your company will do well and reward you with increased dividends and a higher share price.

It is unlikely that those who were poking the borax at me and long termers like me will now be patting us on the back but now that some years have passed the returns are apparent and will only get better with time.

Sorry but I just had to gloat.

c Share Investor 2007