“I Buy When Other People Are Selling.”
January 12, 2013 Leave a comment
J.Paul Getty is one of the world’s greatest success stories. The wealth he amassed in his lifetime was stupendous-estimated at roughly 1/900th of the entire U.S. economy. Today that would equate to $160 billion.
Getty got his start in the windswept oil fields of Oklahoma. In 1914, at the age of 21, he became a wildcatter, searching for oil in some of the most unforgiving land in the country.By the time he was 23, Getty had earned his first million (although $1 million in 1916 would be worth about $20 million today). But J. Paul Getty was not just an oilman. While he did make a fortune drilling for oil, he also made a fortune in a completely different place — Wall Street.As he put it.“In the Depression I did what the experts said one should not do. I was a very big buyer of oil company stocks.”
Consider the the story of Tide Water Associated Oil Co. Getty first bought the shares in 1932, in the middle of The Great Depression. The Dow had dropped from a high of 380 in 1929… all the way down to 40 — a fall of nearly 90% in three years. Investors had dumped everything. No one was buying stocks.Getty first bought shares of Tide Water at just $2.12 per share. Five years later, they traded above $20. And this is just one example of his success. Some stocks he owned grew to 100 times the value he originally bought them for. Read more of this post
There is an important distinction between prospects for a company and prospects for the stock of that company. One can be good and the other can be bad. All the good things management says about the company may already be reflected in the high price of the stock which may, in fact, be due for a fall……. It behooves investors to be aware of this and to remember that the stock of even the best company with the best prospects should be bought only if it’s reasonably priced.-Dick Davis
In most cases, when you buy is more important than what you buy. You can make money on the most marginal company if you buy it at the right time; you can lose money in the bluest of blue chips if you buy it at the wrong time.
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