NYCB: the case against Long Term Buy and Hold

LTB&H fans will regularly provide up-and-to-the-right charts that “prove” LTB&H works. This will commonly be accompanied by an article claiming something like “$1,000 in ABC stock 20 years ago would be $xx million today!”

This would be true. And misleading at the same time.

It doesn’t appropriately give heed to the many stocks that did not “prove” the same concept.  Example: NYCB.

Its early 2000s glory days are long behind it. And if one had held on all this time not only did they lose many years of investing time, never to be recovered, they also missed out on substantial gains in stocks that came after while their capital was tied up in NYCB.

Additionally, cherry-picking like this violates the standard “past performance is not a guarantee of future results” disclaimer. 

Dogma is no good for anyone. And it can be particularly hurtful in the stock market when people are counting on solid returns to grow their capital.

#strongtermbuyandmanage