Hello and welcome to our community!

[jaytblankenfeld]

He never claimed that all he made was a 15% return. His book will show you how to make 15% and better. It has worked for me.

When he made his money was during the dot com boom when everyday ordinary people were making millions on the stock market and they didn't have a clue. He was smart enough to know when to get out. He teaches when to get out in his book.

One thing that is different between Phil and Warren is that Phil will get out of a company, but Warren rarely ever will.

[imran]

I just completed Phil's book and I loved it. It makes sense and I want to learn more. I just signed up at this community. I am from Houston Texas. Hi to all and hope to learn from you all.

[Spoop]

Moshunter,
May I suggest a complete study of Phil's blog as he suggests at this link Rule #1 Blog: Phil Town on Investing: How to Read This Blog the education and homework assignments will help you to accelerate through the steep learning curve.
Personally I found the investment in Investools worthwhile as they provide a much higher return on my time investments.
Now go practice so you can go play as Phil is so fond of saying

[Spoop]

May I suggest a complete study of Phil's blog as he suggests at this link Rule #1 Blog: Phil Town on Investing: How to Read This Blog the education and homework assignments will help you to accelerate through the steep learning curve.
Personally I found the investment in Investools worthwhile as they provide a much higher return on my time investments.
Now go practice so you can go play as Phil is so fond of saying __________________

[npg]

Originally Posted by jaytblankenfeld

He never claimed that all he made was a 15% return. His book will show you how to make 15% and better. It has worked for me.

When he made his money was during the dot com boom when everyday ordinary people were making millions on the stock market and they didn't have a clue. He was smart enough to know when to get out. He teaches when to get out in his book.

One thing that is different between Phil and Warren is that Phil will get out of a company, but Warren rarely ever will.

Warren Buffett understands the power of compounding interest as an investment vehicle. That's why his time-frames are intentionally this long. Dancing in and out of stocks you deny yourself that advantage.

Both have different approaches to risk management. Buffett uses very low P/E valuations to protect himself. Most of the companies are in single digit P/E's or rarely ever over a P/E of 20 like Ben Graham initially recommended.

Phil uses price action to protect himself. The downsides of that have been discussed amply in other threads.

Either way. As long as the global economy is on an upwards slope you will undeniably make money using any method you like (an urang-outan could pick the stocks and make money). Once realities catch up it won't be so easy any more. It can get downright nasty.

I hope you disagree with me ;)

[npg]

Originally Posted by Spoop

Not as intelligent as Buffett but believe we're on the right trail following the lead rabbit

One may be on the right trail following the lead rabbit, but is it the right rabbit?

[joshuat]

Why would you get out of a great company?

Why would you buy a company that isn't great?

The reasonable answer to the first is the company is no longer great, and the answer to the second is that you were mistaken about the quality of the company. Buffett has invariably sold in both those cases.

Everytime you buy&sell quickly you are paying taxes in the 40% range, compared to 15% for long term holding. Then, you miss out on holding during dividend distributions, and other times you can get whacked with distributions gains when you didn't hold the stock during the entire period and participate in the gains during that period. Add all that up and you need to be earning 30% or more, in both rising and falling markets, to get that 15% that Phil touts. More realistically, you need to be making around 40-45% in the good times to account for lumpy returns.

Good luck.

[maxwes]

Re: the tax issue - this is true as long as you are investing in a non-IRA account. Re: taxable accounts, there are some who would argue that holding onto a stock only because of concerns about capital gains tax (as opposed to other more "company relevant" issues) is not wise. It is the cost of doing business.

Also, when you sell out of Great Company A (undervalued with strong growth prospects, etc.) that happens to be out-of-favor at the moment (Mr. Market!), you place the money into another Great Company B that happens to be in-favor at the moment (again, Mr Market). The money is not just sitting there waiting for Great Company A to begin another bullish move. So you do continue to compound interest. When the time is right, you can move back into Company A.

We (at least people like myself who have small amounts of capital to use) have the luxury of moving in and out rather quickly. This can be used to our advantage. Others (those fortunate souls with large amounts of capital), cannot move in and out as quickly.

To quote Bob Dylan "The times they are a-changin'"

But ultimately you have to do what you are comfortable doing. If you are following Phil's philosophy and the results just aren't there, then buy and hold!

For me right now, it is working. If that ever changes, I will keep an open mind and change strategy.

[joshuat]

How have "the times" changed? Transaction costs remain the same as they always been. Market timing doesn't work any better now then 20 years ago, so far as I know.

[maxwes]

Transaction costs are far cheaper. Discount brokers. Online access for the tools, faster trades. Online access for better/faster information regarding companies (opportunities). Better/faster information on investing in general (methods, ideas).

These all enable the small, individual investor. For those of us who work or have a life outside of Wall Street, the scene is far different then it was even a few years. Yes you could have done it, but it would have cost you more both in terms of time and transactions.