Cri de coeur
Please be warned: This post will be painfully personal, perhaps cathartic, and at times incoherent. (What else is new?) Despite this, I will attempt to include principles applicable in general. If, however, you prefer not reading personal notes, you best click past now...
I screwed up. I sold my holdings in Apple/AAPL when instead I should have purchased more shares. This is not the first time I have committed this 'error', nor will it be the last. Now, however, I believe I have a fiduciary responsibility, of sorts, because of you, my reading audience. I cannot simply buy and sell quickly and adroitly as I typically do, I believe I have a responsibility to share what I do, as I do it.
In one of my earlier incarnations, I was a 'retail' stockbroker for Merrill Lynch. At the time (and perhaps still), Merrill had the strictest internal compliance of any firm on Wall Street. Among the many rules was this one, "If you buy or sell the same investment as your clients, your order always comes last." I took to heart this message, and have allowed it to guide me in all I do throughout life. This acknowledgement includes my buy and sell recommendations on this blog; I will not front-run.
Among the recommended books in the sidebar, is one that includes an interview with me. (Only one of several.) In this interview, I say something akin to this, "Who you are as an investor and who you are as a person are not mutually exclusive; each bleeds into the other. Especially if a person is successful at one or the other. That is, if you are successful as a person you likely will not be consistently successful as a trader; if you are successful as a trader, you likely will not be successful as a person. You cannot, for example, have an argument with your spouse, and shout, 'I stop you out!' as you can stop out a stock that gives you and your portfolio too much grief..."
Note the denotation of time; if you invest (greater time frame), it is possible to be successful at each, whereas investing as a trader (lesser time frame) tends to make the objectives mutually exclusive. This point is arguable, but I contend in favor of the non-parcellated mind; that one is unable to comparmentalize specific aspects of one's life and be successful in their general application. The one bleeds into another.
As a person, I am a failure. This is not a whine, but a statement of fact; an acknowledgement I came to grips with long ago. It enabled me to focus on my perceived task, to make money. But I also learned (and posit in my profile above), that there is more to life than the pursuit of (more) money, there also is the pursuit of good times with good friends. This is the worthier goal. (Would you rather die leaving behind many friends or much money?) I suppose, in retrospect, that this blog is my obvious and shameless attempt to win friends and influence people by sharing my 'expertise' re investing.
In the post below (Follow the market leader) occurs a conversation. I included already my 2¢ but forgot to mention that when trading the leaders, one hopes to capture the $5, $10, or $50 of the 100s of dollars the stock will ultimately move. Isn't that better (simpler? easier? Tom, I mispoke earlier: investing might be simple but rarely easy.) than isolating and trading for a $5 profit a stock you believe will move only $6? But this trading decision is one we all fall prey to, including me. I attempt to keep it in check by having in place one rule that states I will buy only the leaders, the long term winners.
But how do you know that the stock you just purchased will be among the rara avis, the few that trend higher for 100s of dollars? There are techniques, some that I have shared here, others I have yet to share, and many of which I am unaware. It adds up that among the many, many stocks you buy for your portfolio, you hold a positive outlook for each. You believe each will be among the few that trend higher for 100s of dollars but along the way, you sell many for a measly $5 profit, or $10 profit, or even for a loss. But you continue the quest, and continue to buy and sell, seeking to buy and (to) hold long term the rara avis. I believe Google/GOOG merits inclusion as a market leader, as a long term winner, as sui generis. You might argue this point; the market argues it each trading day.
Okay, so I sold Apple/AAPL. I also repurchased it yesterday, albeit fewer shares than I had owned. The market has me hornswoggled, mis-reading too much, too easily. I also feel bad(ly) that I was unable to mention this re-purchase to you.
But more to the point, rather than re-initiate my complete holding, I instead swallowed whole gulps of Starbucks/SBUX. Its shares are approximately the same price/share, but I assume less risk for the holding because, as I argue, it remains in a base of long term proportions. Assuming as correct that perception, its upside moves will be mute relative to a stock such as Apple/AAPL that is in the throes of its uptrend. Buying Starbucks/SBUX as a long term holding, however, makes it less likely that I will upchuck it in a manner similar to what I did with Apple/AAPL. My concern was the intermediate term uptrend would suddenly expire.
Simple, but never easy. Omelettes and lemonade. Omelettes and lemonade. Ommm...
Thanks for reading this post. I welcome all comments.
I screwed up. I sold my holdings in Apple/AAPL when instead I should have purchased more shares. This is not the first time I have committed this 'error', nor will it be the last. Now, however, I believe I have a fiduciary responsibility, of sorts, because of you, my reading audience. I cannot simply buy and sell quickly and adroitly as I typically do, I believe I have a responsibility to share what I do, as I do it.
In one of my earlier incarnations, I was a 'retail' stockbroker for Merrill Lynch. At the time (and perhaps still), Merrill had the strictest internal compliance of any firm on Wall Street. Among the many rules was this one, "If you buy or sell the same investment as your clients, your order always comes last." I took to heart this message, and have allowed it to guide me in all I do throughout life. This acknowledgement includes my buy and sell recommendations on this blog; I will not front-run.
Among the recommended books in the sidebar, is one that includes an interview with me. (Only one of several.) In this interview, I say something akin to this, "Who you are as an investor and who you are as a person are not mutually exclusive; each bleeds into the other. Especially if a person is successful at one or the other. That is, if you are successful as a person you likely will not be consistently successful as a trader; if you are successful as a trader, you likely will not be successful as a person. You cannot, for example, have an argument with your spouse, and shout, 'I stop you out!' as you can stop out a stock that gives you and your portfolio too much grief..."
Note the denotation of time; if you invest (greater time frame), it is possible to be successful at each, whereas investing as a trader (lesser time frame) tends to make the objectives mutually exclusive. This point is arguable, but I contend in favor of the non-parcellated mind; that one is unable to comparmentalize specific aspects of one's life and be successful in their general application. The one bleeds into another.
As a person, I am a failure. This is not a whine, but a statement of fact; an acknowledgement I came to grips with long ago. It enabled me to focus on my perceived task, to make money. But I also learned (and posit in my profile above), that there is more to life than the pursuit of (more) money, there also is the pursuit of good times with good friends. This is the worthier goal. (Would you rather die leaving behind many friends or much money?) I suppose, in retrospect, that this blog is my obvious and shameless attempt to win friends and influence people by sharing my 'expertise' re investing.
In the post below (Follow the market leader) occurs a conversation. I included already my 2¢ but forgot to mention that when trading the leaders, one hopes to capture the $5, $10, or $50 of the 100s of dollars the stock will ultimately move. Isn't that better (simpler? easier? Tom, I mispoke earlier: investing might be simple but rarely easy.) than isolating and trading for a $5 profit a stock you believe will move only $6? But this trading decision is one we all fall prey to, including me. I attempt to keep it in check by having in place one rule that states I will buy only the leaders, the long term winners.
But how do you know that the stock you just purchased will be among the rara avis, the few that trend higher for 100s of dollars? There are techniques, some that I have shared here, others I have yet to share, and many of which I am unaware. It adds up that among the many, many stocks you buy for your portfolio, you hold a positive outlook for each. You believe each will be among the few that trend higher for 100s of dollars but along the way, you sell many for a measly $5 profit, or $10 profit, or even for a loss. But you continue the quest, and continue to buy and sell, seeking to buy and (to) hold long term the rara avis. I believe Google/GOOG merits inclusion as a market leader, as a long term winner, as sui generis. You might argue this point; the market argues it each trading day.
Okay, so I sold Apple/AAPL. I also repurchased it yesterday, albeit fewer shares than I had owned. The market has me hornswoggled, mis-reading too much, too easily. I also feel bad(ly) that I was unable to mention this re-purchase to you.
But more to the point, rather than re-initiate my complete holding, I instead swallowed whole gulps of Starbucks/SBUX. Its shares are approximately the same price/share, but I assume less risk for the holding because, as I argue, it remains in a base of long term proportions. Assuming as correct that perception, its upside moves will be mute relative to a stock such as Apple/AAPL that is in the throes of its uptrend. Buying Starbucks/SBUX as a long term holding, however, makes it less likely that I will upchuck it in a manner similar to what I did with Apple/AAPL. My concern was the intermediate term uptrend would suddenly expire.
Simple, but never easy. Omelettes and lemonade. Omelettes and lemonade. Ommm...
Thanks for reading this post. I welcome all comments.
posted by David M Gordon | 6:22 AM
<< Home