Whitney Tilson on holding on to winning stocks

Almost no human being has the ability to do this.  If you want to know the main reason index funds outperform almost all active managers over a long period of time, it's because they never sell their winners.  They let their winners run.  Just look at the S&P 500 index.  The S&P 500 index has never sold a share of Apple, Nvidia, Microsoft, Berkshire Hathaway, Visa, Mastercard, Lilly.  I just named almost all the top 10 stocks in the S&P that drive its entire return.

~ Whitney Tilson, "Be Greedy and Let Your High-Quality Winners Run," Stansberry Investor Hour, 26:35 mark, July 8, 2024

Joel Tillinghast: avoid investing in the single largest stock in the S&P 500

Familiarity can work against investors.  If you continuously invested in the single largest S&P 500 stock by market value between 1972 and 2016, your compound returns would have been less than 4 percent, while the index earned over 10 percent.  A smiliar but smaller effect was seen with the ten largest S&P 500 stocks.

~ Joel Tillinghast, Big Money Thinks Small, p. 60

Dan Ferris on index funds

Psychologically, you've gotten used to buying every dip for the last 13 years going back to 2009.  Psychologically, you've gotten used to the fact that your bonds protect you from the drawdowns in your stocks.  And it's really hard to shake these.  We still have people saying, "Oh, the best thing you can do is just buy an index fund and hold it for the long-term, and Warren Buffett says to do it, so you know it's really good."  But Warren Buffett is a beneficiary of this status quo...  He's worth tens of billions of dollars because of this financialization...  So it's sort of weird to listen to somebody like that at this moment.  Nobody's right all the time and nobody's right forever.  And what looks like long-term wisdom of the ages can sometimes look really bad for awhile and I think right now we're learning that just buying an index fund and hanging onto it might not be the greatest thing in the world.  This might not be a great moment to double down.

~ Dan Ferris, Stansberry Investor Hour, 8:45 mark, June 21, 2022