The Web Site of
Victor Niederhoffer & Laurel Kenner
the scientific method, free markets, deflating ballyhoo, creating value, and
laughter; a forum for us to use our meager abilities to make the world of
specinvestments a better place.
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Buy-and-Hold Work Outside the U.S.?
Buy and hold works in a country where enterprise
system is allowed to work. How many countries qualify?
Is there an index of enterprise intensity and can it
be correlated to market advance? Can we count? What if
a country has a rule of law and a strong enterprise
system but less developed stock markets?
Or what about countries where the enterprise system
does not exactly resemble that of the US and yet
considerable economic growth has resulted over a long
period of time (Germany, South Korea, Japan). Will buy
and hold work there? What if their markets are less
developed and capital allocation is happening through
banks not markets?
What about another category of countries which are
developing fast but not in the US paradigm (China)
with the bulk of the physical growth being created by
100% subsidiaries of foreign companies. What do you
buy and hold there?
Do ever-changing cycles occur there too? What kind?
Finally, the better an enterprise system functions
will there be more and more Studebakers and Microsofts? If so, will frequent stock selection be
even more critical than in a country where corporate
deaths are slower? Will buy and hold be a better
strategy than buy and sell -- just to match up to the
competitive spirit of an enterprise system?