Recently, I read a very insightful article about Bridge on the river Choluteca and the investing lessons it can teach all of us. ‘Build to Adapt’ is the new world order where technology and developments are changing lives at a dramatic speed and people/companies/industries need to adapt to thrive.
Similarly, I believe ‘Buy to Hold Forever’ days are gone from the investing world and it is ‘Buy and Hold if Relevant’. So many changes take place in each industry in 3 to 5 years that many business models itself become irrelevant. Hence, it does not make sense to hold those stocks forever. New opportunities keep emerging and it is necessary to re-align your investing portfolio accordingly.
This does not mean to trade every day, however evaluating investments at least once a month/quarter objectively is a must to stay relevant in today’s investing world.
During 2008 market crash, Google, Netflix and Amazon corrected by almost 50% while during 2020 market crash they have gone up by almost 50%. Today, GE is trading below its 2008 price while amazon has delivered 5000% return in the same period.
If you keep holding those sectors/companies which are being displaced and not adapt, then you may be left with a ‘Choluteca Portfolio’. Super investment of past and irrelevant for future.
.jpeg/:/cr=t:0%25,l:0%25,w:100%25,h:100%25/rs=w:1280)