Keep It Successfully Simple
We recently received the latest edition of Extreme Value written by Dan Ferris. It was entitled "Why you can (and should) put your entire portfolio into Microsoft (Nasdaq:MSFT), Home Depot (NYSE:HD), St. Joe (NYSE:JOE) and Wal-Mart (NYSE:WMT)". It blew us away when he emphatically stated, "...if I had a billion dollars, I'd put it all into the four stocks we'll be covering this month." Yes, we would recommend you become a subscriber. Just go to www.stansberryresearch.com or call 888-261-2693. This jolted us into the train of thought of how simplified and care-free our investment portfolios would be if we took Dan's advice. We would have to add an equal proportion of Goldcorp (NYSE:GG) and Silver Wheaton (NYSE:SLW) to feel complete, but that would only be a stock portfolio of six companies. "Boring" you say? Well, maybe so but it would sure give us a lot of extra time to pursue the many other activities and interests that we somehow never seem to have enough time for these days. How valuable is a refreshing nap each day? How precious is the time spent enjoying the company of our dearest relatives and friends? Keeping life and our investments "successfully simple" has so many advantages that we couldn't begin to describe them all.
One of the advantages, and a big one it is, is that it allows us to concentrate our investment dollars in the shares of the companies and the sectors with the most upside potential over the next 5 or 6 years. As Jim Cramer likes to remind us all, we are always better off investing in the "Best of Breed" companies. The greatest stock investor of all time, Warren "Keep-It-Simple" Buffett, built his billionaire empire on this very premise. If you look at the main holdings of his "Super-Holding-Company", Berkshire Hathaway (NYSE:BRKA, BRKB) you see how Buffett practices what he preaches. You will see about 5 to 10 holdings where the vast majority of the investment money is concentrated. These carefully chosen positions which have been held for a long, long time are the main reasons the class A shares recently hit an all-time high of $110,000 per share!
The other big benefit of concentrating our investment dollars in the best companies we know of is that it allows us the time and possibility to monitor these companies very carefully, day after day. As Dan wrote so poignantly on this topic,”When I want to check on how my investment is doing, I don't check the quote. I check the financials, the annual report, call or email the company, etc. I only check the quote periodically if I'm thinking about buying more." We must confess that this sounds really wise, and you might know if you read all the sections of our website www.CheckTheMarkets.com that we created an investing technology with the acronym of WISE, which stands for "Wise Investing, Simple and Experienced". This approach really speaks to our technology, and reminds us powerfully of how Bill Gates, Warren Buffett, George Soros and Jim Rogers became incredibly wealthy.
Now the big question is not whether this approach is worth following. The big question is, "Are we WILLING to follow the simplicity and focused investing that this approach exemplifies?" After reading Dan's latest issue and looking back over our many years of over-diversifying and "piddling around" with a list of stocks way too long to keep up with, we are really tempted to answer "YES,YES, YES, we are willing to keep our investments successfully simple!" At least we think we are willing. What's your opinion on this topic? Do we all have the conviction and self-discipline to do this?
One of the advantages, and a big one it is, is that it allows us to concentrate our investment dollars in the shares of the companies and the sectors with the most upside potential over the next 5 or 6 years. As Jim Cramer likes to remind us all, we are always better off investing in the "Best of Breed" companies. The greatest stock investor of all time, Warren "Keep-It-Simple" Buffett, built his billionaire empire on this very premise. If you look at the main holdings of his "Super-Holding-Company", Berkshire Hathaway (NYSE:BRKA, BRKB) you see how Buffett practices what he preaches. You will see about 5 to 10 holdings where the vast majority of the investment money is concentrated. These carefully chosen positions which have been held for a long, long time are the main reasons the class A shares recently hit an all-time high of $110,000 per share!
The other big benefit of concentrating our investment dollars in the best companies we know of is that it allows us the time and possibility to monitor these companies very carefully, day after day. As Dan wrote so poignantly on this topic,”When I want to check on how my investment is doing, I don't check the quote. I check the financials, the annual report, call or email the company, etc. I only check the quote periodically if I'm thinking about buying more." We must confess that this sounds really wise, and you might know if you read all the sections of our website www.CheckTheMarkets.com that we created an investing technology with the acronym of WISE, which stands for "Wise Investing, Simple and Experienced". This approach really speaks to our technology, and reminds us powerfully of how Bill Gates, Warren Buffett, George Soros and Jim Rogers became incredibly wealthy.
Now the big question is not whether this approach is worth following. The big question is, "Are we WILLING to follow the simplicity and focused investing that this approach exemplifies?" After reading Dan's latest issue and looking back over our many years of over-diversifying and "piddling around" with a list of stocks way too long to keep up with, we are really tempted to answer "YES,YES, YES, we are willing to keep our investments successfully simple!" At least we think we are willing. What's your opinion on this topic? Do we all have the conviction and self-discipline to do this?
posted by Marc Mentor at 1:37 PM
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