March 29, 2006

Rule #1 - Chapter 1

I’m still reading Phil Town’s book “Rule #1”. I just finished Chapter 1. Here are the salient points to me.

  • Since 1985 only 4% of mutual fund managers have beat the S&P 500. Those that did, did so by only a few percentage points.

  • He sets up what he calls the three myths of investing and then demolishes them:
    • Its hard and it takes too long
    • You can’t beat the market
    • Diversify, buy and hold.

Of the three, I don’t see “myths” two and three as being real. In particular myth 3. Those who know my investing style know that I don’t believe in the buy and hold strategy. When I’m active in the market I typically am in a trade from just a few days to a few weeks at the most.

Posted by The Vorlon at March 29, 2006 11:11 AM
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