Elevator Rides and Investment Horizons

I had the opportunity to ride in a few fancy elevators in recent weeks.  You know, the ones with television screens.  Both featured business stations, CNBC on the one, and Bloomberg on the other.  CNBC featured charts of various stocks, showing their performance over the course of the day.  Bloomberg, on the other hand, is clearly more oriented towards the long-term investors.   Their charts featured performance of stocks over a, wait for it, two-day performance.

The following is an excerpt from the 1999 report of the Sequoia Fund.  The rest of the letter can be found here.  Sequoia’s reports and annual Q&A meetings are some of the best investment writings out there.

“The tag line in a major advertising campaign by a leading online broker reads ‘In the world of investing, twenty minutes can make you — or break you.’ Another electronic broker markets what it calls “bed-and breakfast” specials: if you buy a stock online from them one day and sell it the next morning, there is no commission charge.  The New York Times reports of a $100,000 investment account opened at a leading electronic broker. In a one year period, this account generated a staggering $1.1 billion in principal value of total purchases and sales of stocks. The return to the investor as a result of all this frantic activity?  The account earned $15,000.”

The Sova Group is currently not in development of a widget that will feature the Fund’s hourly performance on this website.  We will update you if plans change.

 

 

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