I have recently been selling off my high cost mutual funds and buying individual stocks.
I purchased mostly stocks that are stable, long term dividend payers with businesses that I think i understand. Then after reading the Long Term Investor thread in early January, I decided to take a chance on 4 shares of Amazon and 20 of Baba without any real research, basically completely because I was afraid on missing out.
As a result, this completely emotional and fear based purchase is up almost 7% in a month, with my supposedly rational, long term picks (accumulated over the last 2 months) up only slightly after todays sell off.
Maybe I should just buy on gut instinct from now on!
I looked at the earnings, cash flow, profit etc. for Amazon and Alibaba from my typical value perspective and concluded they are too expensive. Then I looked at the possibility that they could actually grow like crazy for the next few years, and decided, much like bidding on a nice house during the housing boom, that I didn't want to be "priced out" and miss potential huge gains. Your discussions in the Long Term Investor may be rational and reasonable, but I think what motivated me to actually submit the order was something else!
I plan on keeping these (and all my retirement stocks) for 20 years plus, so I am not worried about the performance short term; it just seemed crazy that these two stocks have continued to go up. We'll see how things go after earnings.
Also, don't worry- I didn't take your observations and philosophy in the Long Term Investor as investment advice, rather as a good foundation about how to think about managing a portfolio.
Dont know that it matters to anyone....but I have sold my BABA stock now. It is referenced a while back in the LONG TERM INVESTOR thread. Mainly due to needing some cash to add to positions in Amazon, Facebook, and Google. Lesser reason was it appeared to not be performing as I desired over the short term in this very hot momentum market we are in right now.
Thanks for the update- I consider BABA to be part of my "Emerging markets" investments. Not a huge position, but it rounds out a niche.