A Few Quick Thoughts
I like keeping an eye out for all evidence against the fully invested mantra. From studies I’ve read missing the same number of best and worst days, weeks or months have similar results to this study.
An investor who missed the 10 best performance days, out of 110,000 trading days, would have had a portfolio that was 69% less valuable than a passive portfolio. Avoiding the 10 worst days would have resulted in a portfolio that was 337% more valuable than a passive investment, according to an article titled “Black Swans in Emerging Markets” in Journal of Investing Summer 2009 issue.
via 14 Foreign Blue Chip Stocks with Dividends Greater than 5% — Seeking Alpha.
Of course none of these studies are very relevant, because the probability of such occurrences is close to zero. The point is to refute the crazy marketing “logic” of fund managers who spout “if you missed the 10 best days” type of bull. And on a more positive note reinforce the idea that down moves are more volatile.
Penrice Soda, which I posted about the other day, has finally come down into my strike. Chalk another victory up to patience.
Suntech and Akamai, which are both in the Fusion Investing Portfolio and in accounts I manage were touched my the upgrade pixie dust. I wouldn’t buy either right now, but plenty other investors probably would. I’m happy to hold both at current prices. The problem with both companies is that despite being leaders in quickly growing industries, those industries are hard to differentiate yourself in.
If I had to buy one right now it would be Akamai. Analysts expectations are lower and Akamai continues to do a great job expanding their products, plus I continue to love their cash generation.
Disclosure: Long all three stocks mentioned.
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