The Sequoia Fund vs. Conoco Phillips

For those of you that keep up with your stock market history, you know that the Sequoia Fund was the mutual fund that Warren Buffett recommended investors should choose during his transition period between closing down his privately run partnership and gaining control of Berkshire Hathaway. Investors listening to Buffett would have been well-rewarded for following his advice, as the Sequoia Fund is one of the best performing mutual funds of the past half-century.

But one thing I do want to show you is that active management, even when it is well-earned, does carry consequences. For a moment, let’s hop back in the wayback machine and travel to December 31st, 1981, the first day on which I can find publicly accessible trading data for the company that is now Conoco Phillips.

At that time, an investor could have been mulling two decisions: to invest $10,000 into shares of … Read the rest of this article!

Selling Stocks Online (Ugh, A Bad Idea)

Old people and their stock certificates are great because the physical acts required to cash a stock certificate add some friction to the buy-and-sale process that might make an investor more likely to hold onto their stocks rather than sell them as a knee-jerk reaction.

I was reading Vanguard’s recent Whitepaper on how its investors are buying and selling stocks online more than ever before. In particular, I noted the data point that 41% of Vanguard clients had purchased some security that was then sold online within a year of the ownership position in 2018. In comparison, only 8% of investors in 1960 sold a security that they had purchased during the same year. It is not a perfect comparison since the high costs of purchasing stock in 1960 severely limited the pool of potential stock buyers, but the point remains that being able to sell stocks easily online can … Read the rest of this article!