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Old 05-03-2010, 07:23 AM   #81
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The former is far ahead of the latter in cap gains...

... but the latter is always more educational.
I always learn more from my mistakes than from my successes. That is true in investing, homebrewing, marriage, etc. Maybe some day I will get good at learning from others' mistakes, although I suppose that is what I got for the grad school tuition and CFA blood, sweat and tears.
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Old 05-03-2010, 07:25 PM   #82
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It still isn't clear to me that NFLX will ever make enough money to justify the stock price.

I'm a lot more interested in businesses that flow obscene amounts of cash.
Since we're all picking on Brewer...NFLX prices then and now:

11/17/2005: $25.74
5/3/2010: $101.88

So it outperformed the S&P by about 250% (the S&P was basically flat).
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Old 05-03-2010, 07:31 PM   #83
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The moral of the story in individual stock picking (not that I do much of it any more) is to cut losses short with a stop and let the gains ride with a trailing stop.

If you do it right you can profit even if you are wrong 60-70% of the time because your gains will be larger than your losses. That's sort of like a .300 hitting baseball player being a "star" even if he fails 70% of the time.
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Old 05-03-2010, 08:02 PM   #84
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Since we're all picking on Brewer...NFLX prices then and now:

11/17/2005: $25.74
5/3/2010: $101.88

So it outperformed the S&P by about 250% (the S&P was basically flat).

What I missed was the massive paradigm shift in this business. I tend to stick with boring businesses and avoid things like tech, drugs, etc. because I know I cannot call big transformational shifts. This underscores it, I guess. Suppose I should stick to boring businesses from now on, which reflects my portfolio (if you count reinsurance as boring).
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Old 05-03-2010, 08:08 PM   #85
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The moral of the story in individual stock picking (not that I do much of it any more) is to cut losses short with a stop and let the gains ride with a trailing stop.

If you do it right you can profit even if you are wrong 60-70% of the time because your gains will be larger than your losses. That's sort of like a .300 hitting baseball player being a "star" even if he fails 70% of the time.
Tell me about it.

I like to go bargain shopping too, and have sold out stocks when I doubled my money, only to kick myself to see they kept rising to 5X or more. I have also hanged on to real losers, and occasionally rode them down to bankruptcy.

Still, I have survived and even beat the S&P in the last 10 years. Of course I am still learning from my mistakes.
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Old 05-03-2010, 08:20 PM   #86
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What I missed was the massive paradigm shift in this business. I tend to stick with boring businesses and avoid things like tech, drugs, etc. because I know I cannot call big transformational shifts.
That is actually pretty similar to what Warren Buffett has said and has been part of his aversion to investing in tech.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 05-03-2010, 08:48 PM   #87
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There is always more than 1 way to make money...
And then, there are even more ways to lose it...
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Old 05-04-2010, 07:21 AM   #88
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That is actually pretty similar to what Warren Buffett has said and has been part of his aversion to investing in tech.
I can understand his aversion.

Actually, as I get closer to my goal I am just waiting for my big holdings to hit my price targets and then will be selling out in favor of wide diversification. I will probably always keep ten percent of the portfolio or so for individual securities, but once I am FI I will be strictly controlling this amount to a modest level.

Now to hit a few price targets...
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