Post of the Day
December 17, 1998
Dow Investing Folder
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Subject: Trouncing the Dow, Part 2
Having read with interest TROUNCING THE DOW, PART 2, an excellent, objective, and well written article by TMFSandy (Bob Price), I feel impelled to make certain observations without intending to be unnecessarily critical of any strategy, system, method, or individual.
Benchmark Investing, BI, Trouncing the Dow, or however it is most appropriately referrenced, is a somewhat complex methodology which apparently, judging from the many posts on the board, seems to involve perhaps a bit of discretion and decision making throughout a perhaps varied time period. It may well provide guidance in making stock selections, but there may not always or ever be any specific, mechanical, or automatic point determined at which the sale should be made, or at least this seems to be the case if I read the posts correctly. The posts also seem to indicate that there is a certain divergence of opinion about what is truly intended and that some of the instructions, recommendations, or suggestions may be general rather than specific.
|"Moreover, great effort seems to have been expended in the acquition of the necessary data or information upon which to make decisions."|
On the other hand, the Foolish Four variations all depend on some variation of only only two criteria: yield and price, freely and readily available to everyone from a variety of well known and public sources. The selections are most clear and could literally be made in less than 15 minutes each year. Sales require no particular decision making and do not require extensive soul searching or timing problems. Buying and selling are clear, straightforward, automatic, and mechanical without the distractions which emotions and concerns can bring. It can be truly unemotional, successful over long periods, and liberating in that one may be well invested and yet remain free to do other things throughout the rest of their lives.
If, in searching for potential higher returns, one is willing to forego whatever comfort there might be in having only a 4 stock portfolio, it is very and much more simple and time saving to merely select from a combination of Foolish variations.
For example, if one were to combine ER2 with UV2 and EY1, one would find a 2-5 stock portfolio which would yield comparable results with a whole lot less bother, trouble, and uncertainty.
|"There are other combinations which can provide superior results. There are other combinations which can provide greater regularity in results."|
There are other combinations which can provide superior results. There are other combinations which can provide greater regularity in results. One may pick and choose which combination or combination of combinations seems most appropriate in and for one's particular situations and under one's personal circumstances at the time.
Benchmark Investing is not the best performing Dow possibility out there. It is certainly neither simple nor clear. It is complex and envolved, is demanding of the expenditure of a goodly amount of time and effort, and is not particularly easy to employ. It is not Foolish!
We should keep our minds open to other possibilities. We should continue the search.
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