Gyroscopic Investing

In the last 14 years Dell has been a remarkably bad investment.

Over this period of time hundreds of millions of people around the world have bought computers and Dell shareholders have managed to benefit from this secular trend to the tune of 0% returns.  The stock today is trading at 1998 levels.

That really sucks.  If I was a Dell shareholder I would be annoyed.

But I thought stocks were the only investment you needed to own in a portfolio and were less risky the longer you held them?

BTW. Not to pick on my alma mater Cisco. But their share price has done about the same.

Although over the last 20, neither has been too shabby (looks like about 35% and 33% CAGR -- but those first 8-10 years were more like 60% CAGR, a sure sign that future returns would have to be much lower, and should give today's Apple investors pause).

What? You mean that buy and hold didn't work? I thought that was the holy grail?

Craig, I'd be curious to hear more about your background and how you got so smart.  :)

Reub wrote: What? You mean that buy and hold didn't work? I thought that was the holy grail?

I tend to think that buy, hold, diversify and rebalance is the holy grail!

Craig, I'd be curious to hear more about your background and how you got so smart.  :)

I think this quote (attributed to many) summarized it best:

"I am a great believer in luck, and I find the harder I work, the more I have of it."

In hindsight (always 20 20 vision with hindsight) it is apparent that much of what Dell does went from revolutionary to commodity in a terrible hurry.

This is why I am not a stock picker.