From: gts (gts_2000@yahoo.com)
Date: Mon Jun 16 2003 - 11:00:05 MDT
Robin Hanson wrote:
> Maybe Buffet is in fact much more rational than the average
> trader.
Incidentally, it is really stretching the definition of "trader" to include
Warren Buffet in that category. One reason for his success is that he makes
very, very few transactions. His strategy is almost a pure buy and hold
strategy.
Buffet is famous for saying something to the effect that you should start
life with a wallet sized card on which the numbers 1 through 20 are printed,
and that each time you invest in a stock you should punch a hole through a
number. After you've punched the 20th number, you're done. No more stocks
for you.
These ideas are not very popular with commissioned brokers, however. For
obvious reasons they tend to encourage active portfolio management. Those
who, like me, come to realize the wisdom of buy and hold eventually get out
of the business to preserve their integrity, assuming they have any
integrity left to preserve.
-gts
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