Why Five Years Is Not Long-Term Investing

I had an old teacher send me all the research of John Russell Holmes that examined a century’s worth of investment data from 1871 to 1971. Isn’t that great? I love reading anything written in a textbook from the 1970s and earlier because the writing style is so clean–everything flows beautifully with the paragraphs neatly bound in a hypothesis, data, interpretation, conclusion format. The only downside is that there is less personality in the writing but this is offset by the elegance of logic and the chance to pick up on the anachronisms of the time. I had no idea the 1890s were called the “Gay Nineties” and the 1950s were called the “Fabulous Fifties” but then textbooks started phasing out the terms in the early 1970s to disambiguate from homosexuality.

Anyway, one of the first things that I learned is that the phrase “long-term investing” should really be used … Read the rest of this article!