08-09-2019, 06:13 PM
We share a lot of like views on the equity markets. Unfortunately I suspect I got my nose bloodied a few more times than you did. Free financial education resources are a lot easier to find now.
I've owned many dumpster fires over the decades. I'll end up there again but not nearly as often. There is a line where patient and fearless becomes gullible and stubborn. When I get crushed these days I look at opportunity cost of staying the course. To me there are different types of dumpster fires.
1. The company is clearly going bankrupt. Look for something with more hope. SDRL, JDSU and Nortel were these stocks for me. Unfortunately there were more as I got bludgeoned when the tech bubble. (luckily I didn't have a lot fo money to invest then so it was a cheap but still humbling lesson) I hung around for the dividend cuts and eventual BK. Lost 99% of my investment. Had many chances to get out with half but refused to accept the reality these companies were toast. This isn't KHC.
2. The company has made some horrible missteps, but they are in a good industry sector. It's gonna be ugly but you'll be OK in a few years if you keep the faith. Close your eyes and keep buying. Oddly enough XEL was this stock for me. Bought in about $15, backed up the truck at $7.50 when they were looking completely incompetent. Today it's a 10 bagger with DRP. This isn't KHC either.
3. These companies are often fallen blue chip stars. Tired products in industries that can no longer grow. Add a few bad management decisions and they are in a whole that will take many years to dig out of. This is KHC. You have to forget your mistake and look forward and not worry about teaching the market a lesson by blindly holding on, or worse yest average down for more pain. What is the opportunity cost of waiting 10 more years and praying to just get back to even.
I now choose to go find something with more hope with those dollars. I don't want to use the money to overpay for another stock and suffer again. Maybe it's a new dumpster fire, but one with a rational chance of rewarding your patience while you're still young
If you paid over $50 for KHC, you are likely to years or decades for any hope of breaking even. It might see $15 first. As many advise, catch it on the way back up if you must. You've already proven you can't pick the bottom.
I've owned many dumpster fires over the decades. I'll end up there again but not nearly as often. There is a line where patient and fearless becomes gullible and stubborn. When I get crushed these days I look at opportunity cost of staying the course. To me there are different types of dumpster fires.
1. The company is clearly going bankrupt. Look for something with more hope. SDRL, JDSU and Nortel were these stocks for me. Unfortunately there were more as I got bludgeoned when the tech bubble. (luckily I didn't have a lot fo money to invest then so it was a cheap but still humbling lesson) I hung around for the dividend cuts and eventual BK. Lost 99% of my investment. Had many chances to get out with half but refused to accept the reality these companies were toast. This isn't KHC.
2. The company has made some horrible missteps, but they are in a good industry sector. It's gonna be ugly but you'll be OK in a few years if you keep the faith. Close your eyes and keep buying. Oddly enough XEL was this stock for me. Bought in about $15, backed up the truck at $7.50 when they were looking completely incompetent. Today it's a 10 bagger with DRP. This isn't KHC either.
3. These companies are often fallen blue chip stars. Tired products in industries that can no longer grow. Add a few bad management decisions and they are in a whole that will take many years to dig out of. This is KHC. You have to forget your mistake and look forward and not worry about teaching the market a lesson by blindly holding on, or worse yest average down for more pain. What is the opportunity cost of waiting 10 more years and praying to just get back to even.
I now choose to go find something with more hope with those dollars. I don't want to use the money to overpay for another stock and suffer again. Maybe it's a new dumpster fire, but one with a rational chance of rewarding your patience while you're still young
If you paid over $50 for KHC, you are likely to years or decades for any hope of breaking even. It might see $15 first. As many advise, catch it on the way back up if you must. You've already proven you can't pick the bottom.