[Fisherdan]

Originally Posted by Dean2

I think what you guys are saying has a lot of truth. I do not consider investing gambling, sitting at the Casino or a game that is rigged so only the big players can win. Now on the other side of the coin, we do have those that are gambling, and that does apply to a large number of the new traders. When you go looking for 100 to 2000% gains over a few months, you are clearly gambling. Bitcoin is the clearest recent example, as is the Gamestop run up. The IPOs I posted above were issued at fairly reasonable valuations for the most part, but doubled and tripled or more shortly after issue, then dropped back to or slightly below their issue prices because their earnings and growth do not support their frenzy driven highs. If you can buy IPOs at close to their issue price, ride them up and sell off quickly you can make money, holding them long term is not going to work. With the other high risk stocks and options it is fine to take 500 dollars each and make bets on 20 of these things hoping to get one winner. You might get lucky, but that is not investing.

It is entirely possible for the average person to do extremely well in the market, but you aren't going to do it swinging for the fences on every investment. If between dividends and increase in share price you can average 8%, you will double you money every 10 years. For every $50,000 you start with it will become $800,000 in 40 years. I bought 30 to 50 year Provincial Government Strip bonds back in the late 80s that were yielding roughly 10%, with zero risk. That means 30,000 invested in 1986, in a tax sheltered plan, is worth just over $450,000 today. You don't get rich fast but you will get rich if you keep doing those kinds of investments.

Interestingly enough, as of this morning lumber is off 25% from its highs and still dropping. I had said a couple of posts ago that I sold all my commodity type investments a while ago and the recent drop in lumber once again demonstrates that commodities are a place you can make money but they are not suitable for long term buy and hold portfolios. Long term buy and hold is restricted to Blue chip dividend paying Oligopolies or monopolies, Banks, Pipelines, and Utilities.

This is a really good and sobering post. Just curious about your thoughts on oil, and Canadian oil companies? A lot of these companies (oil sands especially) have a target on their back politically. But oil just seems to be going up and up… I’m not sure if it’s going to stop anytime soon.