Holding in the long-run gives you no guarantee that your equity holdings in company x will definitely pay off as companies can collapse, get delisted or be removed from the index or stop being covered by analysts.

Thus, one has to pick the right blue chips for the long-term strategy to work as well.

All the best for your intrinsic value calculation and picking of the right stocks.

Be well and prosper.
.-= Panzer´s last blog ..CIMB Fixed Deposits =-.

But in the long run, stock is a great hedge tool against inflation, cos Companies will always ensure its profitability by increasing its revenue and profit, faster than our wage increase.

So I would still adopt to my own strategy, buy into blue chips and go for long term growth. I had read a book recently on some simple check list of identifying a good long term stock, including calculating intrinsic value. Will test it out and share with you.

I think Taleb is not advocating that the world will collapse but his thoughts on how the establishment works to make everyone think that stock markets can only go up (and up) misses the risks that we have to “time” it eventually. When one requires cash for day-to-day expenses when we decide to “retire” or stop full-time employment means that coming to our retirement years, we need to consider an exit strategy which involves some degree of timing.

Be well and prosper.
.-= Panzer´s last blog ..HLF Golden 55 Plus Fixed Deposit Rates =-.

Actually sometimes I wonder if I am better off NOT reading these 2 books, even though they are (apparently) highly recommended and have received rave reviews. From what I gather, the recent events may constitute what he defines as a black swan event but then if we were to fear or live in trepidation of such events occurring (of which we have no forewarned knowledge or control over), then it will be like the case of Chicken Little who is afraid the sky is going to fall. With this mindset, one may keep hesitating from deploying capital with the inherent fear that everything may come crashing down.

Even though the recent crisis has made everyone re-think about risk-reward and the long-term returns from investing, I still maintain my view that over the long-term, equities can outperform bonds and the economy will continue to grow. Thus, putting our money to be managed by prudent Management is still the best thing to do. Banks pay scant little interest because they are using the same money to invest in companies/funds as well. So we may as well beat them to it and put our money directly into such good companies.

If I adopt a long-term perspective, then I need not fear uncertainty. It’s important to have a suitably long time horizon.

There’s more to say but I will end here. Otherwise, this may end up as long as one of my posts Hahaha…

Cheers,
Musicwhiz