Did you get it? This is Citibank (C). Founded in 1812 and a market cap of roughly $162 billion dollars. Citibank happens to be one of the largest banks in the world, ‘too big to fail,’ but not too big to be a horrible long term investment. This stock used to be at $550, now it’s barely a $50 stock! How is that long term investment working out? Let’s look at one more for good measure.
This is American International Group, better known as AIG. Founded in 1919 and has a market cap of roughly $76 billion dollars. This investment has gone from over $1400 to $55 in a 10 year period. How long do you think it’ll be before it gets back to $1400? Who knows, but it’ll likely take a very very long time. Let us NOT forget about Bear Sterns, ENRON, and Worldcom/MCI. They were all ‘great’ blue chip type companies with outstanding fundamentals, where are they now?
The point here is not to ‘trash’ on traditional fundamental investing or blue chip stocks, but rather to show that no form of investing, including trading, is perfect. I would venture to guess than FAR more money was lost in bad GE, C, AIG, Bear Stearns, ENRON and WorldCom investments than has ever been lost in the day trading realm, yet one method is lauded as ‘the best approach’ and the other method is scoffed at as being pure gambling, yet NOTHING could be further than the truth.
