The Decline Of A Buy-And-Hold Stock

Dig through a 1990s edition of Kiplinger’s Magazine, and you will find many lists of long-term investment suggestions that include Mattel (MAT). This is understandable. The net profits on each toy sold during this period was over 10%, and the best long-term performance range during this era came between 1982 and 1996 when the stock returned 16% annually.

If you could hop into the wayback machine, it’s easy to see why Mattel would earn a spot on the list of buy-and-hold investments when you were considering the question in, say, 1993. Barbie dolls, the signature Mattel product, used to earn over 30% net profits. Back then, it cost the United States Treasury 4.5 cents to coin a nickel, and you could be technically correct in arguing that ownership of the Barbie franchise was a better license to print money than that of the U.S. Treasury.

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