Tags Posts tagged with "Stocks"

Stocks

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For some reason, perhaps my hoarding tendencies, I still feel like the longer that I own stock in a company (as the value increases) that, through the price increases, I continually own more and more of that company.

That’s wrong.

There is zero connection between the two.

If I bought one share of Tesla at $60 and now it’s worth $180, sure, I made $120 (on paper) but I still only own one share.

I need to start letting go. Buy low and sell high.

Both of my Elon Musk stocks have earned me over 100% as of right now. Even the dud that Facebook appeared to be at first is up over 50%.

I should SELL!

I’m not so greedy as to *expect* returns that high — I should take the money and run, errr, re-invest in something I think is undervalued…

Here goes nothin!

2 2129

Money HoardingSo the markets are just roaring so far in 2013. It’d be hard to imagine anyone is “down” this calendar year — unless you’re really, really terrible at investing.

Since I started purchasing individual stocks last December, a couple of my choices are up over 40%.

I should probably cash out.

In fact, I know I should.

I’ve made my money — take it while you can.

Well, that’s where the problem lies…

As I’ve mentioned in the past, I’m a hoarder.

I like to accumulate.

(No — I’m not like the hoarders on television…)

It’s been working great for me with my 401k — and my hockey jersey collection — where I just keep adding to the pile and the value consistantly keeps getting bigger and bigger.

That’s not how it works with individual stocks.

As a mostly absent portfolio manager, I have no desire to be a day-trader or anything but I totally understand the concept of buy-low-and-sell-high.

I know how that works and how it leads to wealth at a much advanced pace.

I just never pull the trigger. I grow too attached or something.

Looking back on my childhood, we moved every few years to a new house. Each subsequent move was to a bigger and better house.

I wasn’t privy to the mortgage bill or anything, since I was only 7 years old by the time we hit the fourth house, but I do see how you can go from house-to-house, getting bigger and better along the way, while keeping your mortgage bill roughly the same.

The size of the house doesn’t determine the size of the mortgage — the folks accross the street from us paid DOUBLE what we did for a similar but smaller house.

I’d bet if you compared our two mortgages, you’d be hard pressed to determine that we live in the same neighborhood.

Buy low, sell high. That’s the path to take…up, and up, and up…

I know that.

Yet I sit in my first and only house today — knowing full well that I can technically afford something twice the size and, by now, could probably be in something three times the size.

The reasoning there is a bit more complicated, though, since I like where I live and enjoy the freedom that a sub-$500 mortgage allows us.

But there shouldn’t be any irrational emotional connection with the stocks!?

Dude, you’ve made over $80 on a $200 investment in less than a month. Sell Tesla now!

I can’t even justify my own reasoning.

It’s like…by holding on longer, I own more or something.

But that’s not how it works. I know that.

If I own two shares at $80 and now they’re worth $100 — I still only own two shares.

I bought low — I need to sell high.

That goes for you, Google, Dunkin Donuts, Tim Hortons, Tesla, Solar City, and Ford.

My only loser was Apple (which I purged in disgust months ago…)

Facebook and LuluLemon have essentially stayed right near what I purchased them for.

I’m pretty good at picking stocks (even when it’s not a boom year like 2013 has been), I think…

My end game is terrible though.

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The whole bonds to stocks move I made back in December has been pretty darn successful in the grand scheme of things. Had I not purchased a cent worth of Apple, well, things’d be even better.

Honestly, I’m not even sure *why* we hooked up… Upset with myself.

So, rather than wait anxiously for Apple to recover (when deep down, I hope they never do), I’m going to sell now and buy up some stock in other companies that I have legitimate confidence in.

The first company that came to mind about a month ago was Tesla.

No, it’s not that I think electric-powered luxury roadsters are cool — though I do think electric cars are a better investment than any hybrid.

To me, a hybrid is kinda like half-assing it.

You either do it or you don’t.

You can’t have it two ways!?

Like how Subarus, in particular, which aren’t even hybrids anyway have that “PZEV” insignia badge on the back with the little green leaf.

“Partial Zero Emissions Vehicle”.

Partial Zero?

Say what?

Anyway, since I’m not in the market for an electric car — having just purchased a swagger wagon — why would I invest in Tesla?

Well, I’ll tell you…

First, the company is not named after 80’s and early 90’s rock bank Tesla. You know, that one hit wonder with the song “Signs” where all the girls would sing along with the “Huh” during the break?

Did you know that was a cover tune? It was originally recorded by a Canadian band named “Five Man Electric Band” over 40 years ago now… Look it up.

So, the company is actually named after Nikola Tesla — a bad ass inventor from back in the Thomas Edison days that probably should have electrocuted himself multiple times. In fact, I’m sure he did.

Anyway, geeks know who Nikola Tesla is. I used to be a geek.

And the CEO of Tesla Motors is a geek — a geek that I went to school with.

Elon Musk went to the same university that I did and though we only crossed paths once or twice (he’s a couple years older), I didn’t forget him.

The unusual name was partially to blame.

Okay, mostly to blame. Ever notice how many people you encounter with really really unusual names in University? Where do they all come from?

Anyway, after leaving school, he went on to create PayPal of which I was an early adopter prior to it even being called PayPal since I’d heard around campus that it had been developed by “one of ours”…

So, he hit the ground running right out of school, started a bunch of really successful companies — including Tesla Motors, and hasn’t really looked back since.

He’s a winner — and having done it repeatedly, dumb luck can’t be to blame.

Sign, Sign, Everywhere a Sign

So, to recap: Nikola Telsa played with electricity, the band Tesla covered a song by Five Man Electrical Band from Canada, Elon Musk grew up in Canada and founded a company that he named Tesla to make electric cars.

To quote a line from the song, “Can’t you read the signs?”

I should have bought this stock a long time ago.

Of course they’ve been on a tear this past week or so having now started making more “regular looking” electric cars — that just got great reviews — and are probably over-valued in the short term but once the price settles into a groove, I’m going with them.

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So, I’ve been meaning to write an answer to the as-of-yet unasked question, “How’s the stock market experiment going for ya?”

I’ve been so far behind on posting the net worth updates that it wouldn’t make sense to answer the question without some numbers to look at but I’ll tell you this…

Apple sucks.

I’ve always held this opinion.

But I left my better judgement at the door and momentarily bought into their hype machine when I decided to go out and buy individual stocks via ShareBuilder…

And guess what?

Apple has been the anchor in my portfolio — down over 30%.

For every dollar I made from my donut-related investments, I’ve lost two more dollars because of Apple.

Even the ongoing Lululemon transparent pants debacle (which sounds more like a value added feature, if you ask me) hasn’t hurt my bottom line significantly…

Lesson learned.

Shoulda bought more Google instead.

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Okay, so now I’m all fired up now about not having my “play” money invested yet…

Lululemon [NASDAQ: LULU], which I called a “BUY” on Tuesday, went up 7.26% today.

Yeah, SEVEN PERCENT.

And I don’t own any of it yet…

Grrrrr…

What I need to try to keep in mind is that my initial investment will only amount to maybe 2 shares worth so while 7% sounds like I really missed an opportunity, truth be told, mathematically, it’s only around $8.

NBD.

Still… this waiting game is kinda crappy.

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So with this ShareBuilder thing on the go now, I’ve been reading up a lot on the commission fees for each “trade” I make.

The fee is $9.95 for a “Like, right now” trade and $4.00 for a scheduled “Tuesday” trade.

I picked out 7 stocks for my initial investment next week. I’m not 100% certain but I think I’ll get dinged the $4.00 commission fee on each one of them so… 28 bucks off the top.

This is why I didn’t go the “Like, right now” route even though it’s killing me that the money is sitting idle right now (and my stock picks are going up…) — that would have cost like $70.

Ouch.

From the unsettling stuff I’ve been reading over the last day or so, it seems Sharebuilder can be one of the higher fee options out there… and, yeah, when we’re talking maybe $100 investments, a $10 fee is pretty harsh.

But then I looked at what I’m paying in fees on my 401k…

Holy crap.

I’m not second guessing myself anymore.

This is a good route to be on.

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So, after toying with the idea for at least a year, I finally redeemed my remaining I-Bonds earlier this week (around $750 worth) to use the money to fund investments on the stock market.

As such, I opened up a ShareBuilder account since it’s pseudo linked to ING (where I have my savings account).

Now, I know, CapitalOne is about to swallow them both up and re-brand (which I think sucks) but it still seemed like the most appropriate option for me.

So, to sidestep some of their higher fees, I’m abiding by their rules and only investing on Tuesdays.

Sadly, my “cash” deposit didn’t arrive in time to pick up my first group of stocks today so I’ll have to wait until December 11.

No biggie.

More time to research.

I say that, but I’ve made up my mind pretty much already.

Now I know we’re coming up fast on this fiscal cliff and that the bottom could virtually fall out from under me in less than 30 days but you have to start somewhere.

I’m not worried, things always recover. Always.

So, I sold off the I-Bonds partially because the TreasuryDirect.gov website is such a hassle but mostly because I believe that, even with the risk of losing money every now and then, I can “earn” more than $2 per month with a $750 investment.

When I was in the fourth grade (1986), our school had one of those Junior Achievement “Stock Market” games where we were all given some imaginary money and had to pick some stocks and then track/trade them for a couple of months.

This was back before the internet and CNBC so we were all walking around with the business section of the newspaper and lots of graphing paper. Pretty funny mental image…

I mean, do you think 4th graders even know what graphing paper is?

That there’s a Business section?

Or even what a newspaper is?

Anyway, everyday the newspaper listed the NYSE, NASDAQ, and American Stock Exchange. I’m pretty sure newspapers don’t even bother with that anymore — it sure filled up a bunch of pages, though…

Most kids went after cool companies (at the time) like Nike, Coca-Cola, or one of the insurance companies pretty much every one of our parents worked for.

Me?

Well, I wasn’t going to bother with the NYSE or American Stock Exchange cause the print was too small and the font was, well, lame. The Nasdaq listings were larger, had fewer fractions, and, well, they were on their own separate page that, when forced to share the business section with classmates, I’d get it to myself.

The primary stock I picked was ItoYokd.

(I also bought Reebok which was the anti-Nike and was just becoming popular…)

No clue what they do (or did — they’re not listed anymore). In reality, I just though the name ItoYokd looked cool and the price was right.

I won handily riding that stock. Like, quadrupled my initial investment in short time.

It was truly a shame that it was only pretend money.

On occasion, through high school, I’d check up on ItoYokd and kick myself again and again (and then again) wishing the “game” had been real.

Anyway, I’m grown up now (can you believe I’m 36 already?) and have $750 worth of “play” money.

I know hindsight is 20/20, but there are so many sure thing companies that I would have invested in… early.

Google’s one, for sure. I mean, who didn’t see that coming?

I abandoned Yahoo permanently the day I found Google. I switched to Chrome when it was still beta. And I’ve spent countless hours mindlessly looking at satellite photos of places I used to live on Google Earth. Why the hell didn’t I buy in?

It’s a bit late now, obviously, but I knew. Amazon is another perfect example. Who didn’t see that coming?

They’re modern day ItoYokds.

Except that I know (and like) what they do.

So what companies will be part of my initial investment?

Well, here they are:

F – Ford Motor Company : $11.31

I said it years ago and I should’ve put my money where my mouth was. I don’t own a Ford and I don’t really want a Ford, either.

I do, however, like Ford.

Not to the point that I’d put one of those Calvin-pissing-on-a-Chevy stickers on my car or anything but I love that they didn’t need a bail-out, that they use Mike Rowe as a spokesperson, and that they make cars that don’t look like everything else on the road.

Their designs of late have been, well, progressive. Do I think mood lighting and a radio that you talk to are stupid and ridiculous (in that order)? Yes, I do.

But I give them credit for doing something new — something most car companies have been too chicken to even consider.

Toyota has sorta done it with their Scion line (of which I own one) but Ford did it with their flagship brand. Balls.

Hat tip to Hyundai and Kia for doing the same thing — I’d buy in to them too, but they’re both actually still private companies.

Anyway, with Ford on solid ground and now the sudden resurrection of the Lincoln brand, well, they’re a sure thing in my eyes. They pay quarterly dividends too which, I’m sorry, is extra cool.

FB – Facebook : $27.46

A botched IPO, major sell-offs, and tons of bad business press can’t sway me.

While not a social media whore, I visit Facebook first thing in the morning and last thing at night. Every single day. My soon-to-be 65 year old mother does the same. And apparently millions of other people do it too.

The price is right on this one and without a viable competitor in sight (MySpace, what? GooglePlus, who?), it’ll be darn near impossible to overtake them at this point.

As Google is to search and Amazon is to retail, Facebook is to, well, personal web pages and a lot of face/screen time. The ad revenue will only increase as they improve “monetizing” it all and they’ll be up there in the stratosphere with Google and Apple in a few years time…

GOOG – Google : $691.03

Yes, it’s expensive.

And yes, it’s *way* too late to jump on board with dollar signs in your eyes but behind Facebook, this is the site that I spend the most time on.

With an operating system now, being the leader in the browser war, and their own tablet (which will be under our tree this Christmas), they’ve diversified enough so that they’re not going to get overtaken and discarded like Yahoo did.

So while it probably won’t go way up in a hurry ever again, I’m pretty certain it won’t fall much either.

AAPL – Apple : $575.85

I loathe this company.

Always have, always will.

I do have to give them credit where credit is due though. Somehow they’ve turned their millions customers into mindless drones that keep coming back for more. Repeatedly.

I mean, how much of a difference is there between the iPod, the iPhone, the iPad, and the iPad mini? The overlap is tremendous (in name, even) but countless folks own all four devices, upgrade them regularly (at a premium), and can’t stop buying apps and music for them. Cha-ching!

Those Samsung commercials poking fun at Apple fanatics are spot on but, really, a company that regularly needs security and a velvet rope outside of all of their stores is clearly doing something right.

While their ship has long since sailed (rapid growth wise), like Google, I still want a slice.

DNKN – Dunkin Brands Group : $31.18

I don’t really like coffee and donuts are far too expensive these days but I did name my first born Duncan. That’s gotta count for something.

This goes along the same vein as Apple — Dunkin Donuts customers are by-and-large addicts. Loyal addicts.

That, and here in the northeast, they’ve sustained competing entries from Starbucks, Krispy Kreme, and Tim Hortons without skipping a beat. If anything, they’ve grown in popularity. Krispy Kreme and Tim Hortons have even withdrawn from the market.

And with New Englanders frequently moving/retiring to parts of the country with a better climate, the Dunkin empire is primed to expand…

THI – Tim Hortons : $45.70

So while Dunkin Donuts may have a stonghold in the Northeast, they’ve got nothing once you cross the border into Canada.

That’s Tim Horton territory — coast to coast.

With an ever growing population in Canada (mostly due to open immigration) and essentially zero competition in the donut/coffee business, they’re a mainstay north of the border. An icon, even.

Rhode Island and Massachusetts may have a Dunkin Donuts around every corner — big whoop. The second largest country in the world has a Tim Hortons on every corner.

Now, as I said earlier, they tried and failed to enter the market in my neck of the woods but they’re slowly but surely making their presence known in the United States and that’s promising.

Better yet, there are an awful lot of Canadians around (we blend in really well pretty much everywhere in the world) and we’re full of national pride and very loyal to our brands. Hmm…that pretty much sums up why I want it in my portfolio.

LULU – Lululemon Athletica : $70.64

Never heard of them? Well, just wait…

I’d never heard of them either until two years ago when I noticed that my trendy cousin’s entire wardrobe, head-to-toe (and extra comfy looking), was apparently made by the same company.

Since then, I’ve heard their silly named tossed around in high places in the Unites States now-and-then so, while the stock price is kinda high (in my guesstimation), it’s just the tip of the iceberg for them.

Soon it’ll be as fashionable here in the States as it’s been for a few years now in Canada.

Yeah, it’s another national pride selection for me.

Basically, they make yoga clothes. Overpriced and apparently high-end yoga clothes.

I know, I know, so *not* my thing but they’ve almost become more of a “Lifestyle” brand like that overpriced “Life is Good” line that you see so much of.

Their logo is a status symbol. Just wait. They’ll be huge in the US soon.

What do all of these companies have in common?

Mmm… wheels, websites, donuts, and hot bendy chicks in tight pants…

No, actually, they all have a great product and a loyal following.

Sure, gambling on bioscience and pharmaceutical companies could be more exciting and promising but I’m more looking to transition from a sure thing gainer (the I-Bonds) to an even better sure thing gainer that produces healthy returns.

Actually, I’m not looking to gamble so much… I’m looking to win.

This time it’s not pretend.

Can You Dig It?

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