One of the most insightful comments I heard listening to a hedge fund guy talking about the 2007-2008 crash is: There are more sellers than buyers. At the time, I thought this was ridiculous, but at a very basic level, this is the absolute truth. That is why we see in certain situations, the cash in the balance sheet (not even cash + cash equivalents but pure cash) than the total market cap of good companies. It absolutely defies logic but happens all the time.
The Second point I made on another thread is the strategy of the bottom drawer. The biggest proponent of buy hold theory is Buffet and I always look at a summary of his 13F. He buys and sells all the time. He has completely exited his position at Wells Fargo and brought Citi.
Another point against holding on forever is the leadership change of the biggest companies in the world over the past 60 years. It demonstrates the dynamism of the world we live in. If you study the leadership changes of the biggest companies in the world, it provides a fascinating read. In the 1960-1970 world thought IBM would own the world and next it would be AT&T's turn. No one talks about these companies anymore. If you look at the largest 10 companies in 2000, only Microsoft is still there after 20 years. In 2010, Apple just snuck into position number 10. Otherwise, it was replaced by brand new 8 companies in 2020.
Don't get me wrong, short-term traders lose their shirts in the long run and, it was proven by a few studies. Prior to the introduction of the algorithms, there were a select few traders who consistently did better than the market. After the algorithms, this number is getting less and less (compared to the total market returns). However, I do believe that actively trading around these events yields outsized gains if you have the proper mindset. As one of the previous posters alluded, buying CCP at 6 would be a steal. At 35 not so much. You will not get CCP at 6 in rational times.
I still think this market together with CCP is heading south, therefore not adding to my small parcel which I prematurely bought earlier in the month for around 25 dollars. The market has more net sellers than buyers at present. Until we get a complete capitulation or reversal of Fed policy, this goes south despite the company management having a proven track record and reasonable valuation. Buying this sub 20 is always better than buying it at 25.
CCP Price at posting:
$22.79 Sentiment: Hold Disclosure: Held
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