Post by
ol_griz on Dec 28, 2024 12:27pm
Catching Up with the Eddying Flotsam of Comment
Interesting reading all the grumpy reactions I've missed since generally turning away from the markets Dec. 20. The month has been sheer hell for my portfolio so it was good to take a break while tax loss selling persists - just too painful to watch as even my best stocks and blue chippers either take a beating or just slip a bit each day. I think Trump noise and government chaos had a fair bit to do with all that, not just tax loss selling.
Anyway, like Tropical, I am no numbers guy and I think that failing has led me to hold onto some stocks too long when the writing was on the wall.
However, the point I want to make is: years of watching stock performance has made me come to realize that numbers themselves are only part of the story - and I'm not talking about PR, which I've complained about here but which is also only part of it. What is more critical - and dangerous - is how the market focus changes, that is, which metrics are judged to be essential to the assessment. And when you look at the absurd performance of hot stocks or in the current era, meme stocks, that focus comes as close to fantasy as you can get, with ridiculous value placed on ephemeral elements. When the market is all about growth potential valuations are in the stratosphere but when suddenly people start muttering about the "maturing" of the company or its market that can evaporate like a puddle in the Sahara. How long did Bell ride a wave of approbation with the same debt and divvy policy that now causes the rending of hair and gnashing of teeth? I can go on and on with examples but a strict set of valuation rules, religiously followed, probably works out over the long term but sure as heck doesn't reflect how the market behaves.
My reaction to this - and of course it's based on MY perception of how the market functions - has been increasingly to ride an upswing and take at least some profit when there seems to be a pause. Selling when the market sours completely on a stock and my losses will be worse than 15% is still a harder pill to swallow and has cost me a lot of money over the years. I did a little better on that score this year but the question I haven't examined yet is whether lost potential by selling profitables too early is equal to money saved selling losers that dropped further after I sold. On the capital gains front I got it down to a capital loss of about $400 and raised cash in so doing, which is far better than idiotic years when I held big losers and sold winners for outsized capital gains.
Hope you all had a great Christmas. On to a Happy New Year ( whatever happens in the markets and too our little gem of a company)!