FT opinion pieces - take profits or not?
Posted: March 4th, 2021, 10:07 am
I thought about where to put this, like Scottish Mortgage on the IT board: https://www.lemonfool.co.uk/viewtopic.php?f=54&t=23391, but thought it may be of wider interest.
Interesting opinion piece in FT on Monday with rebuttal piece on Wednesday.
"Why it is usually a mistake for investors to take profits"
(Paywall but following a google search result gains access, I think)
A Baillie Gifford fund manager saying to hold for the long term.
This is based on research (by a Prof. Hendrik Bessembinder) that finds that over time most stocks return less than one-month treasury bills, and that real returns are made from only a limited number of stocks - just 1% of them (I remember reading somewhere it was 5%), and the remaining 99% are 'a distraction'
Hence BG tend not to sell.
Rebuttal piece "Baillie Gifford’s never-sell mantra is a song for fools" is by Andrew Dickson, the founder of Albert Bridge Capital (not heard of them, personally)
His points:
It's a misreading of the actual results by Bessembinder - in fact this 1% is in fact a total of more than 1,000 companies - so twice size of S&P.
And it's OK to hold on when it's a winner, but what about when it's not - like Cisco, Kodak, etc.
Enjoy.
Torata
(FWIW, personally, I tend to top slice, although I might take a long time about it, in my portfolios where I have decided % weights. In fact, SMT was about 2x over weight in my SIPP, and I'd intended bringing it back, to par until these recent wobbles made me hold.
But where I don't have weights, I try to let winners run as I flip between fear and greed.)
Interesting opinion piece in FT on Monday with rebuttal piece on Wednesday.
"Why it is usually a mistake for investors to take profits"
(Paywall but following a google search result gains access, I think)
A Baillie Gifford fund manager saying to hold for the long term.
This is based on research (by a Prof. Hendrik Bessembinder) that finds that over time most stocks return less than one-month treasury bills, and that real returns are made from only a limited number of stocks - just 1% of them (I remember reading somewhere it was 5%), and the remaining 99% are 'a distraction'
Hence BG tend not to sell.
Rebuttal piece "Baillie Gifford’s never-sell mantra is a song for fools" is by Andrew Dickson, the founder of Albert Bridge Capital (not heard of them, personally)
His points:
It's a misreading of the actual results by Bessembinder - in fact this 1% is in fact a total of more than 1,000 companies - so twice size of S&P.
And it's OK to hold on when it's a winner, but what about when it's not - like Cisco, Kodak, etc.
Enjoy.
Torata
(FWIW, personally, I tend to top slice, although I might take a long time about it, in my portfolios where I have decided % weights. In fact, SMT was about 2x over weight in my SIPP, and I'd intended bringing it back, to par until these recent wobbles made me hold.
But where I don't have weights, I try to let winners run as I flip between fear and greed.)