MARKET BRIEFING
10
Believe it or not, this sort of thing happens all the time. And it kills me that I can’t get people to take sensible precautions. AMY: In other words, even though you told readers to buy right
PORTER: Well, buy-and-hold is touted because it will
mathematically produce the best average results. But unfortunately, no one’s out there whose name is John Average. You’re not going to get the average results. You’re going to get the results that you earn yourself. And that requires – if you’re going to really be a buy-and-hold investor, that requires an immense amount of emotional fortitude that most people simply lack. A great example is to look at the mutual fund industry. That industry has boomed since the 1980s. And why? Well, because they used a bunch of faulty academic research to “prove” you couldn’t time the markets. Why would they promote the idea that you can’t time the markets? Because they get paid based on assets under management. They need you to leave your money with them, good times or bad. No matter what, a mutual-fund manager isn’t going to return your money and tell you, “Sorry, it’s just not a good time to buy stocks...” It’s kind of like a casino that way. A casino never wants you to leave the table. Same thing with the mutual fund people. So they have to invent a world where it is always a good time to buy stocks. You undoubtedly know their mantra: buy and hold. But it’s all a lie. It doesn’t work. And even if it did work, few people would be able to apply the strategy because most individual investors do not have the risk tolerance. They do not have the emotional fortitude to buy and hold. What happens? You know what happens. They chase hot sectors and investment fads and buy in at the worst possible time. Then, after prices collapse, sooner or later, the pain and fear become unbearable, and they liquidate their investments – usually at the exact bottom. It’s buy-and-fold. There are a lot of people today that are buying Nvidia, and they are going to find themselves in this boat. At some point over the next several months, Nvidia will likely collapse by 50 percent. There will be a giant sell-off, and they will find themselves panicking and selling at the bottom. And that’s why I’m here today. Not to tell you to sell all your Nvidia shares and buy gold. If you are the kind of person that wants to take full advantage of what this bull market can offer you... If you want to wring out all the gains possible...
at the bottom in October 2002... And then called the top in February 2007... If your followers didn’t follow that advice they would’ve been destroyed.
PORTER: Amy, whether you are reading an investment letter from Porter & Co., or Stansberry Research or any other financial publisher... It doesn’t matter how completely dedicated we are to getting you the information you need in the form of research... At the end of the day, we’re just publishers. We can’t execute your buy and sell orders for you – we can’t manage your money. Most importantly, we can’t know your exact personal situation. It may not be appropriate for you to be 100 percent invested in stocks. It probably isn’t if you’re 85 years old. I would recommend that you never own stocks that you’re not prepared to hold for at least three to five years. But we don’t know the exact makeup of what assets you own, or what strategies you most like to follow. But just because we don’t know you in that kind of way doesn’t mean that we want to see you make the kind of mistakes so many of our subscribers have told us they made over the years. You see, among investment professionals, they mockingly call “buy and hold” “buy and fold” behind closed doors. And they call it that because that’s what happens. People think they’re investors as long as it’s a bull market. But sooner or later, the pain gets so bad and the loss is so big, they panic and sell. And when they do, Wall Street wins. AMY: Frustrating. If that’s true, then why is it so widely touted by financial advisers and investment advisers?
Made with FlippingBook - professional solution for displaying marketing and sales documents online