An article at Big Think has some of the absolute worst investment advice I have ever heard.
Ackman asks how can you avoid loses and earn an attractive return over time? Ackman’s answer is that you don’t want to be jumping from one company to the next. Instead, Ackman says, pick a company that you can own forever. In other words, if the stock market were to close for 10 years, you’d be perfectly happy with this investment.
You mean like putting all your money in Enron stock? This is just plain horrible advice. If anyone tells you to lock in your stock with one company forever, run. And I was careful about this. I re-read it several times, thinking surely nobody can be this careless after Enron. But it specifically says, “you don’t want to be jumping around from one company to the next.” Which means you want to keep a really narrow portfolio, which means you’re going to end up holding the bag when that company tanks.
Don’t do it! Remember Enron!
Not only Enron but others. The wisdom is never have more than 5% of your total equities in one company. Most Enron employees had way more than 50% if not 100% of their equities in Enron. The defendants in the EBS case all had more than 50% in Enron if not 70 to 90% depending on the time frame. All of them lost money on Enron and all of them were supposed to be insider traders. Good advice to diversify your investments. The DOJ would have you believe that diversifying is illegal.