Thanks Stocknovice, your experience has been reassuring and is something that I can relate to.
I won’t lie, the last couple of weeks has been somewhat demoralising for me. My portfolio is virtually new this year, and I have had to average into positions as cash has become available. And so like RevTK my average cost price is much higher than most on the board.
One ‘positive’ of the pandemic for me is that I’ve had cash to save; previously I would enjoy spending my money traveling or going out with friends, and living in an expensive city saving cash just hasn’t been a priority for me until recently. But I’ve been pretty much ‘locked down’ since March, which is when I decided to spend time learning about investing properly. Most of my cash injections have come in the last few months, and I have ended up ‘averaging up’ at inopportune moments. I was also slow building up positions initially, as I wanted to ‘average into’ positions, and because I was new I was naturally cautious dipping my toe in at first.
The last couple of weeks has been brutal for my portfolio. I have not even been able to bring myself to check it in that time, even hiding the portfolio value from myself when reallocating from Fastly, although I glimpsed it. After the first couple of weeks in October, my portfolio was up YTD more than I could possibly have hoped for when I started out. I knew an election was coming etc and probable volatility, but I did not trim any shares. Fastly had risen to my joint top holding at 22% and I was contemplating reallocating some, but to where? I watched Zoomtopia and decided I would reallocate there. BAM. The exact moment Zoomtopia finished, Fastly issued their lower guidance. 5 minutes after making my decision, the stock was 30% down, almost 1/3 of my YTD profits gone.
The next ‘mistake’ I may have made was reallocating my Fastly money immediately into other stocks rather than averaging in, to Zoom and Cloudfare, which also then nosedived with the general sell off. It felt like a double whammy (ok holding Fastly altogether would not have done any better). But mistakes are there to learn from, and I’ve made a fair few this year. I had made the mistake of listening to market noise and selling out before I found the board (or any investing community) this summer. For example I had bought shares of Digital Turbine in early April for $4 a share, it recently hit $40 and would have been my first 10-bagger in 6 months (I sold for $11). Similary for Etsy at $35 a share (sold for $65), which at one point hit $150. And others. I have since bought back into both. I wasn’t going to make that same mistake again.
And then the past week the ‘crash’ has continued. I still have not looked, although I know what’s left of my gains are fast evaporating (I am generally aware of the share prices). What is hard to take, is that while many if not most of the board are up +100%/200% or more this year, if this sell-off continues and is unkind for another week or so, I could actually be in a position where I am in a loss this year. How is that even possible? In a year that many are having the returns of their life. And we own the same stocks! What would the point have been of all that work and effort in recent months? Then all these comments about ‘herd mentality’ etc felt like being kicked while I was already down.
And this is where I think it’s important to zoom out and remind myself of the following. 1. I have already been through a few of these sell offs in recent months, for example after Q2 earnings. Each time my portfolio rallied back even harder. 2. We are in it for the long term, these blips really don’t matter along the way, if we are right about our convictions. My portfolio gains are probably only back to where they were a month or two ago.
And 3. mostly importantly of all. Irrespective of what my portfolio shows, I am not empty handed. The learning curve since finding this board has been HUGE. It teaches you an investing education; you need to pay for tuition normally - for example if you wanted a degree from university. Well, we are getting an investing education - for free! People are freely contributing their knowledge, wisdom and experience, and that is invaluable in itself. So I am keeping that in mind, because I know over the long term that is much more important than any $ returns this year. I also realise how fortunate we are to even be in this position at all, all things considered, and that perspective is important.
