chinacat
Moderator
AAPL Long since 2006
Posts: 4,433
|
Post by chinacat on Jul 10, 2021 5:33:34 GMT -8
|
|
chinacat
Moderator
AAPL Long since 2006
Posts: 4,433
|
Post by chinacat on Jul 10, 2021 15:43:52 GMT -8
|
|
4aapl
Moderator
Posts: 3,679
|
Post by 4aapl on Jul 10, 2021 18:01:36 GMT -8
Some of these thing just make sense, or don't, depending on where you are coming from. Windows had been the world of wanting to allow every option, sometimes in multiple ways. At least that was the feeling. At Apple instead is was whittling things down to the choices the made the most sense, and often giving just one way to set them. In the server group this was a little tough, deciding which settings to give a UI to, whereas still allowing all of the settings for the open source server software (ie FTP, mail server, SMB, web server, etc) if you popped down to the config files. Concise and thought out is just different than allowing everything. It's just a whole different UI style. Neither is completely right, as it depends on the audience and their expectations. But later having worked on a project where even installing was a challenge (and the managers felt it was a resume builder), it's obvious that what seems obvious to one, is not obvious to all. Sometimes it's good to have lots of options. Other times, it's just bad planning, UI, and UX.
|
|
chinacat
Moderator
AAPL Long since 2006
Posts: 4,433
|
Post by chinacat on Jul 11, 2021 6:43:07 GMT -8
I worked at a variety of levels, from operating system (mostly device drivers) to user interface (X Window System, Motif) to applications (finance) before settling into management, both technical and business. There are always trade-offs. Knowing your target audience/user base is always the key, along with resisting the demands of sales critters who just want to close a deal and collect a bonus (not that that’s a bad thing ).
|
|
|
Post by Luckychoices on Jul 11, 2021 21:36:35 GMT -8
The enclosed article is one that I noticed today in Apple News and had been published in "The Globe and Mail". It's behind a paywall which is why I included the entire article in my post.
The question about when to sell a stock to "book gains" reminds me very much of those investors who are in a rush to sell AAPL when it's increased so much in value it commands a higher percentage of the portfolio than the investor has decided is the limit for a single stock: 5%...10%...etc. I couldn't have better stated the reasons for staying long AAPL, *regardless* of the percentage. ====================== Why buy and hold beats buy low, sell high by John Heinzl, JULY 9 2021
Question: I have been a DIY investor for the past few years and have developed strategies to build the value of my portfolio and keep the momentum going. For example, I will sell an investment and redeploy the funds when the stock reaches a 25-per-cent loss to my purchase price. I need your advice on a strategy regarding when to book gains, especially when many of the stocks in my portfolio have risen more than 50 per cent.
Response: Warren Buffett said it best: “When we own portions of outstanding businesses with outstanding managements, our favourite holding period is forever.”
Too many investors think the way to make money is to buy low, sell high and repeat. They see the stock market as a casino-like game that requires a strategy or trading system. But if you own a great company – one whose sales, earnings and dividends (if it pays any) are growing steadily – the best approach is often to do nothing.
Consider Amazon.com Inc. (AMZN). Since 2000, there have been three calendar years when the stock fell more than 25 per cent, and four years when it gained more than 100 per cent. The former would have likely qualified as sell signals based on your system. But simply buying and holding Amazon over the past 20 years would have produced a return of more than 24,000 per cent.
Granted, it’s easy in hindsight to point out the wisdom of holding a tech monster such as Amazon. So let’s look at a less extreme example from my model Yield Hog Dividend Growth Portfolio.
Over the past 10 years (through June 30), Algonquin Power & Utilities Corp. (AQN) has produced a total return, including dividends, of 411 per cent. That’s pretty good – it’s equivalent to a compound annual gain of 17.7 per cent – but it hasn’t been a straight uphill climb. During a six-month span in 2013, for example, Algonquin’s stock tumbled 25 per cent. Was that a good time to sell? Nope. It was a great time to buy: Over the next 16 months, the shares gained about 70 per cent.
Even after that large advance, the shares went on to roughly double over the following five years.
This is the problem with selling a stock based on how much it has gained or lost in the past: It’s backward-looking information that, by itself, tells you nothing about how the stock will perform in the future.
Ultimately, I believe the reason people sell based on past performance is emotional. When a stock rises sharply, they worry that it will give back some of its gains. When a stock drops, they worry that it will continue to fall. So they sell. More than anything, it’s a way to control their fear by applying what seem like rational rules to automate their decision-making and, in theory, limit their losses.
But over the long term, this approach will very likely cost you. You would be better off buying and holding proven, profitable companies – or diversified exchange-traded funds – and learning to ride the short-term waves without constantly feeling the need to do something.
That’s not to say you should never sell a stock. If a company becomes wildly overvalued and there is no justification for its price-to-earnings multiple, or if the business has taken what appears to be a permanent turn for the worse, those could be valid reasons to sell. But how much the stock has gained or lost since you bought it is not.
|
|
mark
fire starter
Posts: 1,575
|
Post by mark on Jul 12, 2021 4:47:24 GMT -8
The enclosed article is one that I noticed today in Apple News and had been published in "The Globe and Mail". It's behind a paywall which is why I included the entire article in my post. The question about when to sell a stock to "book gains" reminds me very much of those investors who are in a rush to sell AAPL when it's increased so much in value it commands a higher percentage of the portfolio than the investor has decided is the limit for a single stock: 5%...10%...etc. I couldn't have better stated the reasons for staying long AAPL, *regardless* of the percentage. ====================== Why buy and hold beats buy low, sell high by John Heinzl, JULY 9 2021 Question: I have been a DIY investor for the past few years and have developed strategies to build the value of my portfolio and keep the momentum going. For example, I will sell an investment and redeploy the funds when the stock reaches a 25-per-cent loss to my purchase price. I need your advice on a strategy regarding when to book gains, especially when many of the stocks in my portfolio have risen more than 50 per cent.Response: Warren Buffett said it best: “When we own portions of outstanding businesses with outstanding managements, our favourite holding period is forever.”Too many investors think the way to make money is to buy low, sell high and repeat. They see the stock market as a casino-like game that requires a strategy or trading system. But if you own a great company – one whose sales, earnings and dividends (if it pays any) are growing steadily – the best approach is often to do nothing.Consider Amazon.com Inc. (AMZN). Since 2000, there have been three calendar years when the stock fell more than 25 per cent, and four years when it gained more than 100 per cent. The former would have likely qualified as sell signals based on your system. But simply buying and holding Amazon over the past 20 years would have produced a return of more than 24,000 per cent.
Granted, it’s easy in hindsight to point out the wisdom of holding a tech monster such as Amazon. So let’s look at a less extreme example from my model Yield Hog Dividend Growth Portfolio. Over the past 10 years (through June 30), Algonquin Power & Utilities Corp. (AQN) has produced a total return, including dividends, of 411 per cent. That’s pretty good – it’s equivalent to a compound annual gain of 17.7 per cent – but it hasn’t been a straight uphill climb. During a six-month span in 2013, for example, Algonquin’s stock tumbled 25 per cent. Was that a good time to sell? Nope. It was a great time to buy: Over the next 16 months, the shares gained about 70 per cent.Even after that large advance, the shares went on to roughly double over the following five years. This is the problem with selling a stock based on how much it has gained or lost in the past: It’s backward-looking information that, by itself, tells you nothing about how the stock will perform in the future.Ultimately, I believe the reason people sell based on past performance is emotional. When a stock rises sharply, they worry that it will give back some of its gains. When a stock drops, they worry that it will continue to fall. So they sell. More than anything, it’s a way to control their fear by applying what seem like rational rules to automate their decision-making and, in theory, limit their losses. But over the long term, this approach will very likely cost you. You would be better off buying and holding proven, profitable companies – or diversified exchange-traded funds – and learning to ride the short-term waves without constantly feeling the need to do something.That’s not to say you should never sell a stock. If a company becomes wildly overvalued and there is no justification for its price-to-earnings multiple, or if the business has taken what appears to be a permanent turn for the worse, those could be valid reasons to sell. But how much the stock has gained or lost since you bought it is not. It's interesting that they used Amazon as an example here. This part I bolded at the end applied/applies to Amazon for its entire existence, yet it still is an outstanding performer over almost all periods.
|
|
4aapl
Moderator
Posts: 3,679
|
Post by 4aapl on Jul 12, 2021 6:28:52 GMT -8
It's interesting that they used Amazon as an example here. This part I bolded at the end applied/applies to Amazon for its entire existence, yet it still is an outstanding performer over almost all periods. I though the same thing, though was surprised to check the P/E and see that it is "only" 70 now. That's still roughly double AAPL (and GOOG, FB, MSFT). About the same as NFLX. And roughly a tenth of TSLA. There is the whole mega-growth thing while putting most income back into R&D and growth, so that net income is tiny. OTOH, traditionally retail (and autos) aren't given a big multiple. This time is different? There are differences, and advantages, but how long do they last for these companies? Amazon, like Google, is the place many/most people first turn in online buying. Just like the mindset of going to the mall, that's a big advantage for a long time. Especially right now, where I can't really think of what would be in second place. eBay? Target/Walmart/Sams Club/Costco? (I'm always amazed at how well Sams Club does with their online vs in store interaction, whereas Costco nearly keeps them completely separated.) There is currently an advantage there. Like the UI/UX discussion, I sure don't think Amazon has an advantage on their interface, with too much junk to sort through, and no good ways to do it. Both on items, but also on prime videos. They don't have a good way to get to the needle, even if they have very big haystacks. Like my garage, it's great if you have the part or tool, but you also have to be able to find it. We'll see on AMZN/NFLX/TSLA. Based on AAPL's history it sure seems like their multiples should drop at some point. When and why aren't yet known. Maybe there is enough extra R&D/truck/land spending that can be ratcheted down at some point in their growth cycle to keep the stock up while shrinking the multiples? Truthfully, I haven't looked at them with enough detail to know. But for current direct investors (I suppose I have shares of all in indexes), at least some must look at the details and see a way that it makes sense, currently or in the future.
|
|