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Investing Ideas It’s Time to Think Long Term
Investing Ideas It’s Time to Think Long Term 
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by Andrew Mickey They’ve really done a job on us, haven’t they? The banks are behind this one all the way. Although the total losses and write-downs from subprime lending are hovering around $170 billion, the impact on the stock market has wiped out $7 trillion of wealth. Yes, that’s trillion with a “T.” |
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| It’s Time to Think Long Term |
| Friday, 28 September 2007 | ||||||||
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Dear Reader, Today’s letter may be quite different from what you normally read. Perhaps it’s because I’m writing to you from the Latin Quarter of one of the most beautiful cities in the world - Paris. But even though this city inspires a passion I could never fully achieve back in the States, the letter will be different because of something else. After taking a two-hour walking tour of Paris in which I saw Notre Dame, the Louvre, the Parthenon, Saint-Sulpice, the Eiffel Tower, and walking along the Seine River, I took a train out to the French countryside and stayed at the very last chateau built before the French Revolution. There I met some of the biggest leaders in our industry. And what they said had a profound effect not only on how I view a successful business, but also a successful investor. I noted that every successful business in our industry was built with an eye toward the long term. In other words, every decision made was well researched and thought out months, sometimes even years in advance.
This is because the leaders in our industry knew that if they kept coming up with short-term solutions, they’d continue to need short-term solutions all the time. For instance, take our politicians. They lower and raise taxes, patch up Social Security, patch up Medicare, and then they say that it’s fixed. Meanwhile, all they’ve done is pass on the burden of fixing the problem to a younger generation, sometimes until the next year. Why don’t they sit down, have a long discussion, and actually fix what’s wrong? The United States Constitution wasn’t drafted in two nights. It took a lot of arguing and time to finally get it right. And with a topic as big as Social Security, it’s clear that it would take a long time to fix. But it’s sad to not see our leaders trying to fix it. All they want to do is patch it up again for a few years and hope it doesn’t break while they’re in office. I hope you see what I’m trying to say here. When you focus on the short term, you’ll find that you’re constantly making big decisions. When you focus on the long term, on the other hand, you’ll find less stress because a lot of the big decisions may have been made a long time ago. This contrast between taking a short- and long-term approach has its implications toward investing as well. Too many people focus on the short term, when they shouldn’t be. They buy into a company with fantastic long-term fundamentals. And then after they’ve made 20 percent, they sell the stock. A recent trade in my Global Profits Hotline trading service shot up 34 percent in seven days. I sent an alert to my subscribers to sell off only a third of their position. I did that because 1) I wanted to capture the gain and take some risk off the table, and 2) I know that this stock could go much, much higher in the next month. My hope is that many of those subscribers actually listened to my recommendation to not sell their entire position. There is just so much more room to grow for this amazing company. In the end, we live in a fast-paced society. We want our food in minutes, our gas pumped in quickly, and to go 0-60 mph in three seconds. But if you take this approach to investing, you’re going to have a hard time making money. Good Investing, Source Excerpted from : Investor's Daily Edge
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