Long-Term Buy and Hold is a goal, not an investment technique.

People in the financial press and on the discussion boards frequently intone the phrase "Long-Term Buy and Hold" (often abbreviated LTBH) like scripture. It's regarded as proper behavior in investment High Society, especially when compared to the vice-soaked term "trader," which carries a derisive note usually reserved for whiskey-drinking, cigar-smoking dog kickers. LTBHers are the Rebellion, and traders are the Dark Side.

After you register on our site, you can fill out a profile that asks you for your investing style. Which do you want to be known as -- a buy-and-holder or a day-trader?

The Motley Fool is often considered the home of LTBH, with good reason. We talk a lot about the dangers of frequent trading. It's absolutely true -- frequent trading will kill your returns. It's clearly documented. The main reason that 80% of mutual funds underperform the market is that their managers just can't keep their fingers off the trigger. The best returns are reserved for those who buy a consistently market-beating stock and hold onto it.

That's our goal when we select a stock for the Rule Breaker portfolio. We look for high-quality businesses that can maintain a competitive advantage, ideally, ad infinitum. We totally agree with super-investor Philip Fisher, who said, "If the job has been correctly done when a common stock is purchased, the time to sell it is -- almost never."

It's not surprising, then, that some readers chafed when we suggested in a recent article that we were considering selling our stake in Excite@Home (Nasdaq: ATHM). We have only held this position for two years. Isn't it contrary to our LTBH philosophy to sell a stock so soon? Have we gone over to the Dark Side?

Not necessarily. It's important to note the first part of Fisher's quote:

If the job has been correctly done when a common stock is purchased....

If you have done due diligence on a stock, thinking carefully about the risks involved, then the job has been correctly done, right? Again, not necessarily. An investor weighs potential and risks when she selects a stock, but that doesn't mean that she is always correct. She should not stick her head in the sand after buying a stock. She should periodically re-evaluate her investment thesis and assess to what degree she accurately calculated the risks.

It is doubly imperative to reassess the investment thesis with a Rule Breaker stock. Business conditions in these young stocks can change rapidly. Management can fail to perform. Advantages can be lost. It's important to look frequently at one's assumptions.

In the case of Excite@Home, a lot has changed. The company we bought, @Home, a broadband Internet service provider, later merged with a media company, Excite. That in itself wasn't a reason to sell, but it does mean that the nature of the investment has changed. As investors, we need to watch how Excite@Home's management of that branch develops. As it is, I think the company has done poorly on this front so far. That means they made a very big investment that hasn't worked out very well so far. Not good. I plan to keep a close eye on it in the future.

The company changed. As a shareholder, I had to adapt my investment thesis accordingly. Excite@Home has not performed up to my expectations as a company since the change. I have to decide if it still merits my investment.

We also continue to question our investment thesis. When I bought Excite@Home, I concluded that its convoluted ownership structure was not a serious impediment to its future success. Now, after watching the company repeatedly change its goals and steadfastly neglect its media segment, I'm not so sure I was right.

LTBH is a goal, not a technique. Holding a company that doesn't pass muster is not a profitable investing method. That does not mean that we advocate frequent trading, however. Note that we have not moved precipitously to replace Excite@Home in the portfolio. We take our time in making investment decisions, both buys and sells, in order to be sure that we are taking the appropriate action. Reasonable people disagree with our opinion of the company, after all.

Our technique is to buy to hold, but to re-evaluate our holdings on a regular basis. We hope to make this process more regular and more transparent in the future. The Excite discussion was part of that process. We will also be on the lookout for more profitable alternatives, since our primary sell rule is to sell when we think we've found an investment that seems to offer more promising returns.

Give us your thoughts about LTBH on the Rule Breaker Strategies discussion board.