At Sure Dividend, we advocate for long-term, buy-and-hold investing.
This is because great businesses have an almost magical ability to build long-term wealth with no further input from their shareholders. This is particularly true when stocks are held for long periods of time.
“If the job has been correctly done when a common stock is purchased, the time to sell it is — almost never. “ – Phil Fisher
We wrote about Ben Graham's activism at northern pipe line, but there are other interesting stories involving the father of value investing Value investing and activism go hand-in-hand. Benjamin Graham, the godfather of value investing, discovered how important it is to incorporate activism into a value strategy relatively early in his career, a strategy that Read More
A fantastic example of this long-term investing mindset is Seeking Alpha reader BuyandHold 2012. Remarkably, BuyandHold 2012 is known for never selling a single share of stock (unless forced to through a cash buyout).
We recently had the chance to interview BuyandHold 2012 to learn more about his investing philosophy. The interview can be seen below. Our questions are in bold while B+H’s comments are in normal font.
Our Interview With BuyandHold2012
How did you get your start in the investing world?
Mom suggested that I invest my paper route and grass cutting money in the stock market back in 1970 when I was 14.
She kept giving me copies on Standard & Poor’s. I would underline every single stock with a rating of A minus or higher. And every single stock with earnings that were consistently rising. That year I bought Philip Morris (PM), Mobil and Abbott Labs (ABT). I passed on Berkshire Hathaway (BRK.A), which was a mistake.
Which individuals had the largest impact on your growth as an investor and your overall investment philosophy?
My mother. She was a bit frustrated because she never had a job on Wall Street. She was born in 1921 and told me that in those days girls were encouraged to be teachers, nurses and housewives.
You are known for never selling a single share of stock unless you were forced to by a cash buyout. What prompted this unique investment strategy?
My mother’s uncle began to buy stocks in 1930. He never sold any shares because he hated the idea of paying any capital gains taxes. His stocks were worth 5 million dollars in 1970, which was the year that I began to invest. I could see that never selling any shares of stock over a 40 year period of time was one way to get rich.
To my understanding, you do not use a discount broker, instead preferring to purchase stocks in-person at Scottrade branches. This is in stark contrast to the way most investors buy stocks. Why have you chosen to execute your trades in this way?
Scottrade is a discount broker. It was recently bought by TD Ameritrade. I never buy stocks online. I always walk into the office and buy them in person. And I never have to wait in line. I keep the stock certificates and Direct Registration statements in a safe deposit box at the bank.
We know from a recent interview with Nicholas Ward on Seeking Alpha that your most recent stock purchase was AT&T (T) in September. Prior to that, your most recent stock purchase was General Electric (GE) and Amphenol (APH) back in March of 2012. Why so long between purchases?
My last stock purchase was WBA (WBA). Why did I not buy any stocks at all in 2013, 2014, 2015, and 2016? I made a mistake. I underestimated the tenacity of the Fed to keep the stock market artificially levitated. If I could do it over, I would have bought a few stocks in 2013.
What is your largest portfolio holding today?
Exxon Mobil. 17%.
You have a well-known rule of only buying stocks after there has been a 20%+ correction in the S&P 500 Index. When did you create this rule and why?
The 20% correction in the S&P 500 rule I created quite recently. 2012. Because I bought stocks in 2017, I have obviously abandoned that rule. It became hell waiting.
Do you have any significant “what ifs” in investing? More specifically, are there any stocks that you considered buying that ended up being big winners? If so, which stocks?
I have made so many investment mistakes. It is amazing I have done so well. It proves that you do not have to bat 1,000. My biggest mistakes:
1) Not buying Berkshire Hathaway in 1970.
2) Not buying Medtronic in 1980.
3) Not buying Apple in 1987.
4) Not buying more WMB at a dollar a share in 2002.
5) Not buying Wal-Mart in 1975.
What are your thoughts on today’s stock market? Are there any securities which seem particularly appealing at current prices?
The stock market seems very high to me. So I would suggest that investors proceed with caution. Some stocks that I might buy if they dropped in price:
2) Philip Morris
Thank you for taking the time to interview me, Nick. And good luck with your future investments.
BuyandHold 2012’s insistence on never selling a single share of stock provides a learning opportunity for many investors in today’s fast-paced world.
“The big money is not in the buying and selling…but in the waiting.” – Charlie Munger
We’d like to thank BuyandHold 2012 for agreeing to be interview by us, and we hope that you learned something from his insightful comments on long-term investing.
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