Your three worst moves lately?

[Otter]

(02-18-2020, 01:21 PM)fenders53 Wrote:

(02-18-2020, 12:04 PM)Otter Wrote: If we are looking at long term capital losses (on paper, at least), BUD (purchased just before the dividend cut), F, and SKT have all been real dogs in my portfolio.

We are talking about at anything you care to share Otter.  You know I'm a social butterfly right?  The actual purpose is to start a useful conversation though.  If you invest for 40 years you are going to make some mistakes.  If you repeat them too often you should be in index funds.  Nobody wants to hear that including myself.  Might sound like I enjoy beating myself up but that's not really so.  I learned a hard lesson during the tech bubble and have never repeated that error because it was devasting and it's a wonder I didn't just give up on equities.      

These days yield traps are my weakness.  I don't think I am alone here.  I do it over and over.  There is investing for the longterm, and there is just not heeding the obvious warnings.  (ignoring debt, or worse yet ignoring the fact the old thesis is very wounded and it might be forever)  I can't count how many falling knives I've tried to catch.  Sometimes I catch myself living in the past.  The stock is half price so it has to be a good deal.  I believe this is the biggest pitfall for value and/or DGI investors.  But I can head on over to S.A. anytime for reinforcement of my wishful thinking.  

Big oil is a recent example.  Is oil completely dead? No of course not.  Is there any end in sight to the oversupply problem with OPEC-Russia trying to control production, and numerous big oil producing countries off the market due to sanctions?  No shortage of authors pretending like the market is just stupid and oil will rise 50% any day now.  It's just delusional.  Similar story with SKT cheerleading authors pretending like the companies struggles aren't obvious.  After a couple years the market probably isn't wrong.  I sold my SKT long ago before it halved yet again.  The Div wasn't ever going to justify my bad entry.

Thankfully, over the long term, in a well-diversified portfolio filled with quality DGI companies, winners should outnumber losers over those long time-horizons. Same is true for those holding index funds. I just prefer the DGI approach, as living off the income is preferable to me. 

Few (if any) people are going to invest over a lifetime and have 100% winners in a well-diversified portfolio, even if following a DGI approach and taking value into consideration when making a purchase decision. Statistically, the odds should be good that such an approach would at least match market returns. The long history of positive market returns over long holding periods is also reassuring. 

Sometimes I have seen a completely broken investment thesis and decided to sell (GE and KHC were in that category for me). I try to keep my fingers off the sell button, though.

[fenders53]

(02-18-2020, 01:30 PM)Otter Wrote:

(02-18-2020, 01:21 PM)fenders53 Wrote:

(02-18-2020, 12:04 PM)Otter Wrote: If we are looking at long term capital losses (on paper, at least), BUD (purchased just before the dividend cut), F, and SKT have all been real dogs in my portfolio.

We are talking about at anything you care to share Otter.  You know I'm a social butterfly right?  The actual purpose is to start a useful conversation though.  If you invest for 40 years you are going to make some mistakes.  If you repeat them too often you should be in index funds.  Nobody wants to hear that including myself.  Might sound like I enjoy beating myself up but that's not really so.  I learned a hard lesson during the tech bubble and have never repeated that error because it was devasting and it's a wonder I didn't just give up on equities.      

These days yield traps are my weakness.  I don't think I am alone here.  I do it over and over.  There is investing for the longterm, and there is just not heeding the obvious warnings.  (ignoring debt, or worse yet ignoring the fact the old thesis is very wounded and it might be forever)  I can't count how many falling knives I've tried to catch.  Sometimes I catch myself living in the past.  The stock is half price so it has to be a good deal.  I believe this is the biggest pitfall for value and/or DGI investors.  But I can head on over to S.A. anytime for reinforcement of my wishful thinking.  

Big oil is a recent example.  Is oil completely dead? No of course not.  Is there any end in sight to the oversupply problem with OPEC-Russia trying to control production, and numerous big oil producing countries off the market due to sanctions?  No shortage of authors pretending like the market is just stupid and oil will rise 50% any day now.  It's just delusional.  Similar story with SKT cheerleading authors pretending like the companies struggles aren't obvious.  After a couple years the market probably isn't wrong.  I sold my SKT long ago before it halved yet again.  The Div wasn't ever going to justify my bad entry.

Thankfully, over the long term, in a well-diversified portfolio filled with quality DGI companies, winners should outnumber losers over those long time-horizons. Same is true for those holding index funds. I just prefer the DGI approach, as living off the income is preferable to me. 

Few (if any) people are going to invest over a lifetime and have 100% winners in a well-diversified portfolio, even if following a DGI approach and taking value into consideration when making a purchase decision. Statistically, the odds should be good that such an approach would at least match market returns. The long history of positive market returns over long holding periods is also reassuring. 

Sometimes I have seen a completely broken investment thesis and decided to sell (GE and KHC were in that category for me). I try to keep my fingers off the sell button, though.

It's inevitable we all make some bad calls.  We all know folks that never sell, and some that sell fast if they lose 5% or some other pre-determined number.  Both of those strategies are far too simplistic to me.  A bad entry in the short-term quickly reminds you how important management is.  I think I sometimes underestimate that at time of purchase.  CSCO might be a good example.  They are stuck in a rut, and I have confidence the CEO and his crew will work though it and restore growth.  The dividend is safe in the meantime, even if it fails to grow for now. SKT has good management and if they can work through the negative shopping trends there is a chance.  KHC?  I don't have any such optimism.  If there is any useful point, all this highlights the need to do better research before entry, or even adding shares.  Dividend investors seem naturally attracted to falling SPs and the high yield that accompanies it.  I need to spend much more time researching those decisions.  I guess that is my lesson of the past few years.

[Main Street Stock Investor]

These aren't recent bad calls, but still haunt me occasionally. Sold Sirus XM Holdings, SIRI at $2.50/share, purchased at $0.11/share. Kinda wish I would have held a little longer. Got into Ford, F about 5 years ago. Traded it several times to generate trading income and collected dividends, broke even or slightly positive after that holding period...glad to be rid of it. It was a speculative play. Really got burned on TEVA a few years back. Still own it (9.6 years) and trade it (just bought some again today). The plan is to trade it for income until stock recovers and keep a small position. Maybe they will reinstate the dividend as some point. Trading income produces 4.5% average annual return so I can live with that. But nothing like my AAPL or MSFT holdings. :-)

[fenders53]

Failure to get the timing perfect is not necessarily failure.  Nobody will ever call tops and bottoms perfectly over time.  This thread is not intended to be downbeat.  As I mentioned I find analysis of my mistakes to be positive going forward.  I made mistakes my first five years I'd be embarrassed to share.  Not repeating those mistakes made me a lot of money the next 20 years.  It may sound strange, but a 10 year bull is a bad thing in a way.  A new generation thinking they can't lose and getting reckless.  Some have had time to build their port to $100K+ without a true understanding they really can lose over half of it in short order.  Every generation has to learn it the hard way.

[rayray]

(02-19-2020, 07:39 AM)fenders53 Wrote: Failure to get the timing perfect is not necessarily failure.  Nobody will ever call tops and bottoms perfectly over time.  This thread is not intended to be downbeat.  As I mentioned I find analysis of my mistakes to be positive going forward.  I made mistakes my first five years I'd be embarrassed to share.  Not repeating those mistakes made me a lot of money the next 20 years.  It may sound strange, but a 10 year bull is a bad thing in a way.  A new generation thinking they can't lose and getting reckless.  Some have had time to build their port to $100K+ without a true understanding they really can lose over half of it in short order.  Every generation has to learn it the hard way.

For me it's about time in the market, with that comes experience as long as one learns from their mistakes.

My biggest mistake was flip flopping, not having a solid plan and not understanding my risk tolerance when a downturn would happen. During the dot-com bust my risk tolerance was really low, even though I was invested in mutual funds I panicked and lost 50-60% of my portfolio, permanently, because when the market kept going down I kept selling. Luckily, altogether I lost maybe 8 or 9k dollars total--before the bust I cashed out my only individual stocks Exxon and Paychex to purchase my first home. If I could go back in time I never would have sold Exxon or Paychex. If I would have just sat on my ass everything would have come back and then some.

All together it took me about 12 years to get to 213k; however, that 213k quickly turned into 104k during the Great Recession. So, in essence it took me about 12 years to save 104k dollars...lol...The only difference was I didn't panic no matter how many people told me to cash out. No, I kept buying on a weekly basis and didn't look back--it wasn't easy but I felt it was the only option.

So, back then it took me more then a decade to accumulate just over 100k

Today, my net worth can go up or down 100k plus in two or three months

I've never been a risky investor, but I was the perfect example that you can invest in quality stocks or mutual funds and lose your ass if you don't know what you're doing or not prepared to deal with yourself as an investor in a downturn. Those recessions come and we will get more, multiple recessions/corrections over the course of our lifetimes. The question is how are you going to react? Quality investments are not going to save you if you panic at the wrong time.

Likewise, FOMO (fear of missing out) is also not going to save you in this bull market--it's not going to save you in any bull market. However, if you don't stop and continue to add in quality stocks or mutual funds the average is in your favor--over the long term--even if your portfolio gets hit hard.

I'm not going to lie, I tell people this all the time..if you manage your own investments you better have a steel cast iron stomach when that downturn occurs.

It's not easy.

[crimsonghost747]

(02-22-2020, 11:40 AM)rayray Wrote: I'm not going to lie, I tell people this all the time..if you manage your own investments you better have a steel cast iron stomach when that downturn occurs.

It's not easy.

This is the number one reason I'm so focused on dividend stocks. And I'm way more focused on the dividend income than the actual value of my portfolio.
I know I'll be good since the dividend payments, even if they go down a little due to a company or two cutting their div, will keep me financially secure. My portfolio value going down 50% will not have any effect on my monthly financials. I'm not sure if I'll ever see a 50% decline, but I'm almost certain that I'll see a 30% one at some point.

If my investments would be in an index and the plan would be to sell $X amount every month to fund my life, then I'd probably be absolutely terrified at the slightest sign of a downturn.

[fenders53]

I had hoped this thread would turn out well. Here's some more stupid tricks, and the hard lessons I learned.

I started saving for retirement the day I got married. Pay yourself first as they say. I knew the value of compounding. I worked very hard in an automotive shop for low pay. I was mostly financing my own college as my parents had no money. I got a little help from the Army, but not much back then. I was a part time Guardsman then. Not sure I made $20K a year yet. I owned a modest home. I started saving, $25/mo, and raised it just a fast as possible doing side jobs. The goal was a net worth of $1M by age 53.

Fast forward about 5 years and I have about $20K in the stock market. I'm in an investment club but that was boring DGI stocks doing well lol. With my account I start buying large cap tech stocks mostly. MSFT, CSCO, INTC, PFE, ASND, LU, Nortel, JDSU, MOT. Eventually got bolder and bought small cap tech stocks. Sold some covered calls because those stocks have insane premiums. I was a genius, until I wasn't. They got crushed, and I learned that buy and hold thing only works if you don't pay 80 PEs and a third of your port doesn't go basically BK. I bought the rock star companies and virtually nothing recovered to this day. CSCO is still down 50%. Did I mention I shorted AOL about a year too early? Ouch! Fortunately I gave up after a few years and put what was left of this train wreck into JNJ, XEL, PFE, MSFT. Three out of four was an improvement lol. I didn't even look at them for about 10 years because it made me ill until they finally got about back to even. It took over ten years.

While all this is going on I start feeding my GOV 401K aggressively before during and after the tech bubble. S&P 500 and Russell index funds. All in on stocks as I had ground to make up. That went well but I haven't forgotten the tech bubble. I'm not getting burned again if I can help it. I smelled trouble in 2007. I started moving a little into the Gov short-term bonds. The market got hit about 5% and I went about 50% cash. Waited about a year and started averaging it back in every month, and upping my contributions. Could I ever do it again? Who knows, but I got it right once and it was huge. My account basically doubled in about four years and half of that included taking some GFC beatings with half my money. That move was worth at least $200K. Went back to 90%+ in stocks and left it that way from 2011-2018. Just buy and hold several indexes.

I found this place mid 2018 and I have full control of my 401K now. 100% cash. Started my put selling strategy to enter all my long positions. Market gets hit a few months later. I'm lucky I went in slow but of course I should have jumped in a little deeper last Christmas. But I stuck to the plan and 500 conservative option sales later I am more than fine. I really only need a 4% return now. A chimp could get double that in this market.

My big mistakes were horrendous, but were made very early. My biggest mistakes now are occasionally clipping my own wings selling covered calls as I mentioned in post #1. The option premiums far exceed my dividend income so I'll stick with the plan for now. The market is just too expensive to go all in now, but someday I will be far less cashy. I sleep well. My #1 investing rule is never do today what you wish you had done last week, or month etc. It's really hard to abide by that everyday, especially when I am looking for 5 new option positions in stocks I would like to be long in eventually. They are hard to find and sometimes I am just a little early. There is no fixing that. Gotta have that income. It's probably good I have a part-time job at HD because it keeps me from staring at the market all day everyday lol. I really enjoy selling puts and putting premium cash in my account 2-3 days a week.

I hope some forum lurker finds this helpful, because I sure wish somebody had warned me just a little when I was young. Actually one guy tried. The Prez of my boring investment club. A U of Boston finance major. He invested a couple hundred K in some guy named Peter Lynch's mutual fund during the 1980s. He just shook his head while everyone was riding the tech stock bubble. He was too polite to tell me directly if you pay stupid high PEs and believe patience will fix it, you will learn how very wrong you were. I'll never stop learning, or ever again be so arrogant with any strategy. I'm not quite 60, but I might not live long enough to fix any more extreme stupidity and enjoy my labor. I don't want to be stressing the markets when I am 75.

[ken-do-nim]

That was a very interesting read. I made similar investing mistakes back in the early 2000s, following Nortel and Lucent to the ground.

My three worst moves lately? Hmmm...

1. I got used to shifting money around in my ROTH IRA care-free, and I just did some rebalancing in my taxable account, completely forgetting that if you sell stuff before a year is out, you pay a lot more taxes. Oops...

2. CURE is looking like a dud. It got out to a promising start; I bought around $50 and it's $80 now, but it hasn't budged in a while and all the other equities are doing so well. (I read an article on Seeking Alpha indicating that over the past 30 years, it was the overall single best ETF.)

3. Waiting too long to improve my 401k portfolio. I had it all in an S&P 500 index last year, and there are funds that did and are doing way better available to me.

[fenders53]

(02-08-2021, 09:20 PM)ken-do-nim Wrote: That was a very interesting read.  I made similar investing mistakes back in the early 2000s, following Nortel and Lucent to the ground.

My three worst moves lately?  Hmmm...

1.  I got used to shifting money around in my ROTH IRA care-free, and I just did some rebalancing in my taxable account, completely forgetting that if you sell stuff before a year is out, you pay a lot more taxes.  Oops...

2. CURE is looking like a dud.  It got out to a promising start; I bought around $50 and it's $80 now, but it hasn't budged in a while and all the other equities are doing so well.  (I read an article on Seeking Alpha indicating that over the past 30 years, it was the overall single best ETF.)

3. Waiting too long to improve my 401k portfolio.  I had it all in an S&P 500 index last year, and there are funds that did and are doing way better available to me.

It  was interesting skimming back through it.  A lot of the dog stocks mentioned above came back to life lately and I know some of us owned them on the way back up.  

You are probably smart to get out of SPY.  I still own some but not like I used to.  It's way too concentrated n a few stocks, and some of them are over valuable.  Probably safer ways to get a market return, or beat the index as you mention.  Coming out of the next market bottom SPY may be a great idea once again.  And ouch on your tax error.  I can't even imagine if all my short term option trading was in a taxable account.

[groundbreaker00]

Not selling abbv at 121.00. I knew to do it, but I just couldn’t. It’s been in my portfolio since Abbott spinoff


Sent from my iPhone using Tapatalk

[ken-do-nim]

(02-08-2021, 09:57 PM)fenders53 Wrote:

(02-08-2021, 09:20 PM)ken-do-nim Wrote: That was a very interesting read.  I made similar investing mistakes back in the early 2000s, following Nortel and Lucent to the ground.

My three worst moves lately?  Hmmm...

1.  I got used to shifting money around in my ROTH IRA care-free, and I just did some rebalancing in my taxable account, completely forgetting that if you sell stuff before a year is out, you pay a lot more taxes.  Oops...

2. CURE is looking like a dud.  It got out to a promising start; I bought around $50 and it's $80 now, but it hasn't budged in a while and all the other equities are doing so well.  (I read an article on Seeking Alpha indicating that over the past 30 years, it was the overall single best ETF.)

3. Waiting too long to improve my 401k portfolio.  I had it all in an S&P 500 index last year, and there are funds that did and are doing way better available to me.

It  was interesting skimming back through it.  A lot of the dog stocks mentioned above came back to life lately and I know some of us owned them on the way back up.  

You are probably smart to get out of SPY.  I still own some but not like I used to.  It's way too concentrated n a few stocks, and some of them are over valuable.  Probably safer ways to get a market return, or beat the index as you mention.  Coming out of the next market bottom SPY may be a great idea once again.  And ouch on your tax error.  I can't even imagine if all my short term option trading was in a taxable account.

Oh wow with the thread revival I read this again.  It's almost laughable.  CURE is at $130 now and is one of the bedrocks of my port.  My 401k is back to all SPY, has been for a while, and is much better for it.  None of the other funds they offer can keep up with it over the long run.

As for not selling ABBV at 121 - I'm hoping it will be back there soon enough.  At their pipeline, they have a ton but in particular I'm excited about Veliparib which is in phase 3 trials for treating breast and ovarian cancer.  They also have a Parkinson's disease drug in phase 3.  It's still the best 4% payer I've found.

[Dividendwayfarer]

My bigger mistakes recently:
1. Got in BA after the crash. I thought it was a deal but then we have Covid. I added a few more shares and then eventually sold at a loss. FOMO hurt me.
2. Sold AMZN when I got in around $1500 or under during Covid and used the fund for dividend paying stocks like XOM. Not a great move. I eventually rebuilt my position at a much higher cost basis.
3. Chasing speculative gain. I’m still holding PACB, BNGO, CHPT & NIO at 20-40% loss. I only got lucky with SPOT & WKHS. Too bad they are all in my IRA account as I was planning for some quick gain. I can’t harvest cap loss so am planning to hold a little while. Pretty stupid I was.

I do have a large size of XOM as I bought all the way down to around $30/share. Overall I am 10%+ on paper excluding dividend so I can’t really say it was a bad investment. The premium isn’t great or I’d use covered call to get rid of some.