“Do you have any companies you are holding as investments?”
Andy,
I’ve taken the liberty to launch a new thread, because trying to answer your question is going to take several posts. The short, quick answer is this. I’ve got a lot money more invested in a several hundred companies than the average retired investor does. But I also think that “investing” --as it is taught-- is a scam that benefits only Wall Street, not individual investors.
What’s the usual pitch made to the financially naive? That ‘a stock’ is a fractional, ownership share of an underlying business, which is total BS. Unless the would-be investor is a 5% shareholder (or better), the company doesn’t know that he/she even exists, nor does it care. The would-be investor’s warm, fuzzy feelings toward the company and its services or products are meaningless, as is their supposed due-diligence in grinding through 10Qs/10Ks or the tedium of listening to the dog and pony shows known as “conference calls”. What matters is one’s entry price and one’s exit price of the exchange-traded derivative, which is all that a share of stock is. It’s a derivative that has an often very tangential relationship to underlying, so much so, that exogenous factors often overrule company-specific facts.
How do companies raise money? Two ways. They sell pieces of themselves, marketed as “shares of stock”. Or they borrow money by issuing bonds. In either case, it’s the same, underlying company. Therefore, if company-specific fundamentals matter in determining the price of a company’s stock, they matter in pricing its bonds. The same sort of green eye shade skills are needed, with this diff. Bonds mature. Stocks don’t. Therefore, the value of a stock is only what it can be sold for. If “the market” is selling down a stock, that’s the mark-to-market value of that stock, though it might not be its “intrinsic value” (IV). But IV doesn’t spend too well at the grocery store or gas pump.
I normally carry 300 or so bond positions issued by companies like WMT, DELL, AMZN, AKS, LUMN, CHX, DOW, WY, GS, JNJ, PCG, SLM, RIG, V, OSH, GT, CXW, GEO, SCCO, AUY, etc. In short, if a company’s fundamentals seem decent enough, I’ll buy their debt in favor of speculating on their stocks. I also carry 80 so stock-bond hybrids (known as pfds). As for “stocks” (in your sense of the term), I’m carrying 30 or so, with a heavy emphasis on miners and commodities, plus 20 or so ETFs, especially those that are options-based.
So, yeah. I’m “in the trenches” of this investing stuff and have been for a lotta years. But I’d also say this. THERE IS NO ONE RIGHT WAY TO DO ANY OF THIS STUFF. It all depends on one’s means, needs, goals, interests, and opportunities. But I would also say this. You did a good-enough entry into ENPH (as measured by applying Quill’s rules). But then you blew the opportunity by not dumping the whole of your position at market open on Weds (and possibly getting close to $247 for what you paid $218 on 1/31) and then standing aside to see how things played out over the next couple of days.
Arindam
