Sometimes trends have intra-trend reversals (which are great selling or buying opportunities) and then quickly resume their trends. Motorola tried to break free from their down trend, and almost succeeded with the introduction of their wildly popular Razr phone (I have one). With no new innovative product followup, MOT resumed its downward trend.
Just over 12 years ago I posted about how [Motorola (MOT) was in a downtrend because it couldn’t come up with a new breakthrough product. The Razr phone was a wildly popular for years but MOT just rode it’s coat tails. Traders and investors punished the stock for it’s lack of vision.
I lost track of what happened to Motorola but it appears to have changed to Motorola Solutions Inc (MSI) now. From the look of the chart, it seems to be doing a lot better than before.
Am I mad? No. I vaguely remember that Motorola was about to go out of business so if I had been a long term buy and holder, I could’ve been wiped out. Stock picking for long term investing is hard, really hard. When you put all your money into one horse, and it loses, well you lose. This is why I favor divesified assets like mutual funds or ETFs. You get a basket of stocks and if one blows up you take a small hit.
What does that sound like to you? It’s passive investing. My playing or looking at MOT in 2007 was to trade it and get rich. I never did get rich trading, instead I lost a lot of money to commissions and ‘shake outs’ (stops being it). That’s the problem with active investing, you’re too damn active and not sitting on your hands.
If you’re just now coming to this blog and reading these updates, you’ll hopefully see the folly in trading and acive investing. Passive investing is where you make the ‘sick money’ but only after you stick around for a while.