Reply to Do many households here have $15 M net worth or more?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Has anyone noticed that in DCUMlandia nobody has EVER picked a stock loser?!?

This place is magical. [/quote]

This.

I'm one of the PPs who is worth >$20M in our mid 40s (husband is in finance). He routinely is asked by friends which individual stocks they should invest in. His response? Index funds, index funds, index funds. His position is that he does it for a living and it's incredibly hard - you'd be a fool to risk your life savings on individual stock investing. Wanna play around and have fun? Go for it, but earmark a small amount for that and otherwise - index funds. He practices what he preaches, and our nest egg is invested accordingly.

Yet so many single stock winners here![/quote]

PP here. That's good advice for the average joe. But I'm not a single stock winner....more like a multiple stock winner with some losers here and there.  I would never put all my eggs in one stock basket. And just because you work in finance doesn't mean you know how to pick stocks. Doesn't make them anymore qualified. I have lots of friends in finance and they don't know any more than the next guy about picking individual stocks. They say the same thing as your husband. Anyone can learn to read a P&L statement, balance sheet, perform discounting cost models, listen/watch earnings calls (body language & voice inflection can be very telling by the way), perform channel checks, talk to experts in the industry, etc. Those things are helpful for more mature companies but not companies in their early stages.  You don't need a fancy degree to do that when it can be all learned online for free if you have the time and the desire. But in the end, do as Buffett says, invest in what you know and diversification is for people who don't know what they're doing. I bought a lot of stock in a boring non-tech company called AutoZone back in 2002 around $75/share because I repair the two cars I own and always buy parts there. Thought it would make a great investment. I'm sure you've heard of it. Good management, good cash flow, profits, expansion, management repurchases stock, etc. And car owners are keeping their cars much longer than before especially during and post-COVID thus driving up the need for car parts. The stock now trades for about $3790 for almost a 5000% gain and has made me a deca-millionaire. The S&P500 index in the meantime is up about 600% in the same timeframe. Boring stock for a company that I knew was growing and has made me wealthy. You don't have to pick the next great tech stock. Think out of the box. If you want to go with the flow and take minimal risk then sure go with index funds. [/quote]

You would have had to put massive amounts of cash in AZO to get that return. That's definitely a "single stock winner" mentality. Who was putting $200K in AZO in 2002?!?!

https://stoculator.com/[/quote]

I did. It actually was a little less than $200K investment. About $190K. I took gains from another winning stock and rolled it into AZO. It was about 10% of my portfolio at the time so I was ok with taking the risk. But I held for 24+ years because I knew what I owned.  And sorry I rounded up to deca-millionaire. My bad. It made me a $9.5 millionaire.[/quote]

That’s great. You made a bet and got lucky. You also held longer than probably 99% of AZO investors during that run. This is not repeatable by watching the body language of a CFO on an earnings call, and it’s a bit ridiculous to suggest it is. [/quote]

Whatever. I wasn’t suggesting body language during an earnings call can make me hold an investment for 24+ years.  But it can be somewhat telling in the short term on how the company is doing. Extensive due diligence and investing in what you know is the key. And I guess I’m an anomaly and in that 1% who hold for a very long time because I have other investments that I’ve held even longer that are crushing the market.  By the way, Warren Buffett is famous for saying his holding period for investments is forever and he’s done OK for himself.  He’s had investments in Chevron, Coca-Cola, Dairy Queen, etc for decades.[/quote]

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