Burton A. Johnson

Staying in the Game: Why It's Important

If you are managing a baseball team and the other team scores 7 runs in the first inning, do you quit the field and lose by forfeit? Although it's probable you will lose if you stay; but there's still a possibility of winning.

Why would you sell the stock of a good company that you had bought at a discount to its business value if its price dropped 25-50% in a short period but the sustainability of its business advantage has not? Essentially ALL stocks swing through a wide range of value (+30 to -50%) EVERY YEAR, regardless of the economic cycle.

Analysts are very bright people who, while assidiously counting the leaves, disregard the forest and the trees in order to rationalize what the herd happens to be doing.

Beware of analysts bearing predictions.

Burton A. Johnson, MD, JD
President
Burton A. Johnson Portfolio Management, Inc.