Mistake I made this week

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So let me first start start out by saying Thank you Saul as well a lot of people on this board for the insight and learning and deep dives that you all provide to me. Reading the write-ups are learning experiences for certain in my continued growth of investing.

I am new to investing truly so for me, this past week was semi difficult. At first I went in with the approach that I will just hold out the storm, the more it went, the more skiddish I became and ultimately sold out of a lot of my positions across the board that I had larger winnings. I had a more diversified portfolio than what a lot of people here as I have been in about 15 or so stocks in which I believe a lot of others are closer to 6-8.

I guess at the end of the day, the end decision becomes mine with what I want to do with regards to my portfolio, but I do like to get advice from people as everything is a learning opportunity.

For me, I am younger to where risk is not the end of the world, but when I lost over 15% of my gains in a matter of 3 days, yeah I went into fight/flight and ended up selling a good chunk of my portfolio. Not necessarily over the CoronaViurs because Hell, the flu kills more than this disease does. At the end of the day I keep thinking a recession is going to hit overnight and lose everything.

So with someone who is mostly cash, do people on this board take a more blended approach as investing is concerned (dividend/established/high growth stocks) as far as building out a portfolio or are most just truly in high growth stocks like the 1’s primarily discussed on this board. I’m still deciding my next move currently.

Besides all of this, part of me is saying, forget selling now because at the end of the day, the price I sold compared to what the price of the stock now is mute. I lost out if they are now above my sell price. For me, its not deciding which direction to move.

I still own AYX and CRWD and hope that CRWD has great results in March as i’m currently close to my buy price and hoping to capitalize eventually after holding for a good 6 months.

Some of the stocks I sold were stocks that this board talks about quite a bit and I don’t know if its dumb/smart to jump back in to them even if i’m paying a higher price. Examples: OKTA, MDB, DDOG, TTD. Of course no one knows what going to happen Monday or for the future, if you do, please let me know. But at the end of the day, just trying to get advice as to buying back into stocks you’ve sold and overall portfolio build-out.

Overall, thanks for reading a young mans potential mistake with regards to investing.

Thanks,

BarrelHaus

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Hi Barrelhaus

Asking questions about How Should I Manage My Portfolio? are OFF-TOPIC for our board, but I find myself wondering why in the world you would sell a company like Datadog or Okta because of coronavirus? How could you imagine that coronavirus would affect their revenue or products in any way?

Please don’t respond on board but respond to me off board if you want to respond.

Thanks,

Saul

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Some of the stocks I sold were stocks that this board talks about quite a bit and I don’t know if its dumb/smart to jump back in to them even if i’m paying a higher price. Examples: OKTA, MDB, DDOG, TTD. Of course no one knows what going to happen Monday or for the future, if you do, please let me know. But at the end of the day, just trying to get advice as to buying back into stocks you’ve sold and overall portfolio build-out. – BarrelHaus

If you expect these companies to continue to grow A LOT and become more valuable in the future, how significant is it if you buy 5% higher or lower%? Answer: Not very much.

One of the founders of the Fool, David Gardner, likes to talk about how he bought Amazon for . I don’t recall the number, but it was A LOT less than when I bought just below $300 a share. I sold most of my Amazon for around $1900-$2000 a share. Do I feel badly that I didn’t buy it as cheap as I potentially could have bought it? Not at all. I’m happy I made hundreds of percent on what I DID buy.

Now, TTD is $287 a share. It used to be higher. And it used to be lower. What of it? Well, some time ago I started trying to convince a friend that it won’t be too many years and TTD will be $1000 a share. He waited and waited as it passed $100 and $200 and $300 and he finally bought a few days ago and I’m confident he’ll be pleased in a few years. What about YOU, BarrelHaus? If you pay $300 on Monday… and you have reason to believe it could be $1000 or $2000 a share in a few years, will you feel badly that you didn’t buy at $287? Or lower? No, I suspect you’ll be congratulating yourself on making the wise decision to buy a superior company while it was still in it’s infancy… and you were able to watch it grow into adulthood (whenever that will be).

You will come to recognize that saving a couple bucks now is inconsequential compared to watching multibaggers develop.

If I was your close relative… and not just “some guy” on an internet board… I would counsel you… or anyone… to not focus on whether your entry into a stock position is sub-optimal. Instead, focus on whether this company has the potential to be transformative to your future. The course moving forward should become clear.

Good luck!

Rob
Rule Breaker / Market Pass / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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Asking questions about How Should I Manage My Portfolio? are OFF-TOPIC for our board, but I find myself wondering why in the world you would sell a company like Datadog or Okta because of coronavirus? How could you imagine that coronavirus would affect their revenue or products in any way? – Saul

I interpreted his request differently. As in “The prices of certain companies have gone up. Should I buy anyway?”… which I answered. I didn’t see your post until I submitted mine.

No intent to ruffle feathers or be disruptive. :slight_smile:

Rob
Rule Breaker / Market Pass / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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Hi Rob,

I know that you meant no harm, and neither did Barrel Haus, but while acknowledging that it was ultimately his decision, his post was clearly “Would you guys advise me what to do?”, and we don’t do that on this board. This board is for analyzing stocks.

We can’t tell him what to do. We aren’t financial advisors, we don’t know his age, what his finances are, what his income is, how much he’s investing, how many dependents he has, or anything else. We try to teach people to analyze well enough to decide for themselves. Each of us does it a little differently so the board is a wealth of information. There is a lot of advice in the Knowledgeable about price anchoring, by the way, which seemed to be bothering him. But we don’t answer appeals for “Please advise me what to do.”

By the way, a quick glance at the past 100 or 200 posts will alert you that there are probably zero “Please advise me what to do,” posts. This is a different kind of board.

Best,

Saul

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Rob, I should be clear that I completely agree with the points you made to BarrelHaus (and I’ve said the same thing in the Knowledgebase). It’s just that we don’t want to start discussions about what should he do about buying back or not buying back stocks he’s sold. We want to be evaluating the companies that we are discussing.
Saul

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OK - I’m not going to give you any advice about how to manage your portfolio. I will make two observations based on your post about investing decisions which I believe is on topic for this board.

At the end of the day I keep thinking a recession is going to hit overnight and lose everything.

Overnight? Lose everything? Really? A serious downturn in the market can indeed hit overnight or nearly so, I don’t know that it ever occurs as the onset event of a recession. I doubt it. The relationship of the stock market to the state of the economy is just not nearly so direct and immediate. But setting that aside can you identify any recession that resulted in the permanent loss of everything? Some of the folks that follow this board have had first hand investing experience during recessions. Saul in particular has seen more than one recession. If you are invested in good companies with pristine balance sheets (that pretty well describes virtually all the companies discussed here) they will likely lose some value and they will return as well. Recessions on average last 18 months.

Some of the stocks I sold were stocks that this board talks about quite a bit and I don’t know if its dumb/smart to jump back in to them even if i’m paying a higher price.

What you have described is classic price anchoring. The price of any given stock at some point in the past is irrelevant. Did you miss the nadir in stock price for a company you think will prosper? Did you sell it “too soon” and now find yourself reluctant to pay a higher price? I personally have not once purchased a single stock at the low point in its price history. Never. Not once. Since I’ve been investing as a serious activity (that would be since 2016) I’ve done extremely well even though I have never bought a single stock at it’s low point, and I think I have only sold one stock at it’s high point (I forget the company name, it was a biotech that soared and crashed. I got lucky). My point is you can only make a decision today about how you anticipate the future of a company to unfold. Anything that happened to the stock price in the past is completely irrelevant. However, events that triggered a change in the stock price might still be relevant. The only value you might derive from past stock price might come from understanding of what historical events remain as an influence on the company.

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