Microsoft $MSFT (all-time high near $60)
Intel $INTC (all-time high near $76)
Dell $DELL (all-time high near $60)
Cisco $CSCO (all-time high near $82)
In the aftermath of the dotcom bubble, these stocks have gone...nowhere (yes, I spilled the beans).
If you bought and held an equally-weighted basket of MSFT, INTC, DELL, CSCO, then your returns (excluding dividend) would be terrible regardless of your purchase date.
BOUGHT ON : RETURN : BASKET
End of 2001Q1 : -18.2% : $95.22
End of 2002Q1 : -24.3% : $102.93
End of 2003Q1 : -4.2% : $81.28
End of 2004Q1 : -28.9% : $119.57
End of 2005Q1 : -25.2% : $104.13
End of 2006Q1 : -21.4% : $99.13
End of 2007Q1 : -18.7% : $95.80
End of 2008Q1 : -18.1% : $95.14
End of 2009Q1 : +32.4% : $58.84 (end of the world was a good buying opportunity)
End of 2010Q1 : -16.2% : $92.97
End of 2011Q1 : 0% : $77.88
End of 2001Q1 : MSFT at 27.4062, INTC at 26.0625, DELL at 25.8125, CSCO at 15.9375
End of 2011Q1 : MSFT at 25.53, INTC at 20.38, DELL at 14.68, CSCO at 17.29
Granted, if you bought and held from End of 2001Q1, you would have netted $9.14 of dividends in that 10-year span. That said, the Original 4 Horsemen of Tech have been laggards (and have been replaced by AMZN, AAPL, GOOG, ORCL/RIMM...sorry I refuse to elevate NFLX or PCLN to this level yet).
Four Takeaways
1. "Buy and Hold" can be dangerous as an investor. Take some money off the table and reallocate it.
2. Very important and successful companies may not be good long-term investments...the same can go for career politicians;)
3. Govt regulations/charges (anti-trust, etc.) can be the death-knell to stock appreciation. The bigger you are, the bigger the target is on your back. (Run a search on each company with 'antitrust' in the search phrase...and spend decades reading the results).
4. A Glorified Label can be a sign of a top in hot stocks. Usually, we find out people are amazing after they've succeeded...the same can go for stocks.
No comments:
Post a Comment