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For the last 30 years I have bought stock in tech products I use and like and hold it until I no longer like the product. This simple strategy has dramatically
by geoffc 9y ago
For the last 30 years I have bought stock in tech products I use and like and hold it until I no longer like the product. This simple strategy has dramatically outperformed the indexes. In hindsight the last 30 years have been great for tech so maybe I just got lucky on my industry selection.
- icebraining 9y agoWhat were you holding during the dotcom bust, if you don't mind me asking?
- dboreham 9y agoAMZN, hopefully?
- geoffc 9y agoMy product tastes are pretty mainstream, nothing obscure. In the early days I liked Windows and Netware as I did a lot of consulting work with them and had good runs with them. I sat out the dotcom boom and bust as I was putting all my cash into my gigs. In the internet era I liked the business Saas'es (SFDC, N, HUBS, BOX) because I believe in and understand that industry. I was amazed by OSX the first time I tried it so bought Apple. I bought Amazon, Google and SIRI pretty early when I saw what heavy users of the products me and my family were. I was blown away by the first Tesla I saw and bought that. I like the latest fitbits so I just bought some of that, let's see what happens to that. I don't look at the price or financials on either the entrance or exit so on the negative side I sold Apple a few years ago and missed the last half of the run.
- pedrocr 9y agoWhat criteria do you use to exit then? Do you track returns over time somehow? Would be really interesting to compare to Nasdaq or another relevant benchmark.
- geoffc 9y agoI exit when I either no longer love the product or see a replacement product I like better. I have my accounts at Fidelity and my 10 year RoR is 33% vs 9.78% for the S&P 500 (31% going back to 2003 when I consolidated accounts there). What I like about the approach is that product is a leading indicator and can be judged by anyone. The financials and stock price seem to trail the product by 1-3 years on both the upside and downside. BTW I fully agree with the original premise of the thread and think if you try actively trade on financials, timing etc. as a part timer you will get smoked by the pros, sooner or later.
- pedrocr 9y agoThanks, that's really interesting. I guess you mean RoI and those are yearly numbers? You've multiplied your money by 17? If so, those are some great bets, congratulations.
- IAmGraydon 9y agoYou’re saying you made an average yearly return of 33% for 10 years?
- reanimated 9y agoNo, it's 33% return in 10 year period, so like 3,3% in a year in average.
- pedrocr 9y agoIf it was that it would be a 2.9% return per year and massively underperfom the S&P500.
- Spooky23 9y agoAmazon was a scary ride during the dot com inmplosion. Rode that mofo from $120 to $12.
- omilu 9y agoThat sounds terrifying. Did you hang on for the ride back up, or did you get off at $12.
- Spooky23 9y agoI got out between $30 and $40. I had a hard time reading the tea leaves on the Bezos reality distortion device. :) On a positive note, the proceeds paid for my honeymoon and the balance went into Apple and Red Hat, both of which did good!
- IAmGraydon 9y agoProceeds? Going from $120 to $30 is not generally considered a profitable venture.
- Spooky23 9y ago$30>$12! The 90s were fun and a learning experience. I was working in the mall while going to school, feeling like a financial genius for day-trading at a DSL kiosk at lunch. Amazon was money lost, but also money gained! I rolled a couple thousand dollars into many multiples of paper profit. I pulled some out occasionally and put it in savings bonds, thanks to the constant nagging of my grandparents, so everything I lost was money I never really had.
- IAmGraydon 9y agoYou said you went from $120 to $12 and then from there, back up to $30. I'm not sure how you do your math, but I can assure you that is a net loss of 75% and nothing more.
- djhn 9y agoI'd love to see a list with approximate timelines! This strategy can backfire very hard if your taste in tech products is unconventional.
- PricelessValue 9y ago> In hindsight the last 30 years have been great for tech so maybe I just got lucky on my industry selection. A lot of tech companies went bankrupt. So you got "lucky" selecting the right tech companies and buying and selling them at the right time. If you bought YHOO or Petsdotcom or any of AOL during the dot com boom and held on, then you would have lost a lot of money. For every AMZN there are dozens of tech companies that went under. Also, the last 30 years have seen an absurd stock market boom. Take a look at the chart to see what the last 30 years have been like. The S&P has been on a tear. https://en.wikipedia.org/wiki/S%26P_500_Index#/media/File:S_and_P_500_chart_1950_to_2016_with_averages.png https://en.wikipedia.org/wiki/S%26P_500_Index#/media/File:S_... To the moon baby!
- geoffc 9y agoCompanies with great products rarely go bankrupt in my experience (while the product is great of course).
- deleted 9y ago[deleted]
- Patient0 9y agoOn the other hand, if you had simply invested equally in those four names I think you might still be doing very well despite three of them being worthless now. AMZN is trading at 15 times what it was at the height of the dot com bubble. https://www.google.co.uk/search?q=amzn+stockmprocr&rlz=1CDGOYI_enGB628GB628&oq=amzn+stockmprocr&aqs=chrome..69i57j0l3.7239j0j7&hl=en-GB&sourceid=chrome-mobile&ie=UTF-8 https://www.google.co.uk/search?q=amzn+stockmprocr&rlz=1CDGO...