holding investments..

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lowsignal

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holding investments..

posted on Feb 27, 2017 03:32PM

Peter Schiff educates a poster about the value of being right and 'sitting tight' in two seperate posts. podcast 226.

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Peter K2 weeks ago

schiff you have a great economist understanding of markets,.. i like your persona, and im a client of ur bank, but you are not a good investor.The reason is ur invest philosophy is all wrong. An investment must be profitable from day one, and if ever in a loss it should be closed immediately.You propose holding a loosing trade and living in hope.Not that you wont be right eventually, but by that time it was too painful for one to be happy

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Peter Schiff

Peter Schiff2 weeks ago

You are wrong. My best investment returns have come from positions that originally went against me. If you are a long-term value investor, you will always buy early, and you will never buy the exact low. Cheap stocks will always get cheaper after you buy them. What counts is the price when you sell. One of my biggest winners was a stock that I started buying at 5 dollars per share. It then fell as low as 25 cents per share, and i bought the whole way down. A few years later it was taken over in an all cash deal for 55 dollars per share. There were no reverse splits in the interim.

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Peter Schiff2 weeks ago

Also I currently have a 2 million dollar position in a stock where my cost basis is about 300,000k I started buying it in 1997 and averaged down for many years. By 2008 the entire position was worth about 150K. So after eight years i was sill down about 50%. But the stock paid a good dividend. In fact, over the past 20 years I have received my 300K investment many times over in dividends, so I basically own this 2 million dollar position for free. My current annual dividend is over 1/3 of what I originally paid for the stock. So every 3 years I receive more in dividends than my original purchase price. I agree it would have been better had i not bought a single share until 2008. Then my investment would have been profitable from day one. According to your logic I should have sold it soon after I purchased it for a loss. Well I'm sure glad that i did not do that.

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