Investing: I did it all wrong
January 26, 2010
I’m blushing right now. I’ve talked about dipping my toe into building a modest portfolio before. Bought my first set of shares, decided on a Watch List of about ten stocks with decent dividends and sat back to wait. I was waiting for: more money to spend, and lower prices all around. After all, I’d learned from my 10 share experience, right?
Nope.
I knew that Berkshire Hathaway was going to split the B-shares 50-1 on Thursday and that put individual shares within reach starting in the $60s per share. A little knowledge, my friends, is indeed a dangerous thing.
Kinda like Mapgirl, except I had the warning in her comment specifically about BRKB: I jumped too soon.
With just over $500 sitting in the account, it’s not like I was flush with cash but … *ducking head* I was bedazzled by the brand name of BRK.B and bought 7 shares. I know! I know! Of all the things to impulse buy! I’ve been seduced by a name and a deal. And 7?? What is that number about?
Feels like this is the beginning of a slippery slope, innit? The buying strategy for this investment account was to buy more than 10 shares at a time of a good company at a low price that paid decent dividends. Watch List, remember?
Ah well, not really. There’s a simple solution to that mistake. I have no more ready money.
Thus ends my foray into investing through the Trade King account until I scare up an income and have the cash flow to divert.
Ed Note: Yes, BRK.B is under $70 and has been since I bought the stock. Le sigh. I have no one but myself to blame. Myself and this horrendous cold that won’t go away.
By request:
Can you be more specific about what you did? Because I’m sure it’s not that bad. Details like: Date, number of shares, commission paid, exact ticker. I’m sure it can’t be as bad as some of the lemon moves I’ve made.
I went through the BRK.B rollercoaster as well. As of the moment, I am up about $125 on it, but that is down $125 more I was up recently.
I called it “Trading With Emotions” when I wrote about it on my blog here: http://www.narrowbridge.net/2010/01/trading-with-emotions/
No you didn’t! Assess your decision in a couple of years, OK? Report back then! I think you will be happy with your choice.
There is no set way of investing; everybody has their own strategy. So stick by your decision and don’t feel too bad about it 🙂
“BRK.B is under $70 and has been since I bought the stock”
Sure about that?
http://finance.yahoo.com/news/Berkshire-Hathaway-to-join-rb-1191265612.html?x=0&.v=1
Well, if it makes you feel any better, I bought 5 shares at close to $4k before the split. I sold off one share at a profit. Another share at a 15% loss to invest in other stuff and make money. (I reallocated in KO and GE, i.e. stuff already in Berkshire. How is that a good idea?)
The last 3 shares split and I’m at more of a loss than before. But we’ll see what happens in the long term.
Here’s some good news for you then. BRKB is going to be added to the S&P and it’s up almost 7% this morning (EST). Today might be the day to get out of it. Or change your mind and hang on to it.
Hang on. Don’t sell.
And take this advice for what you paid for it. 😉
Yeah… I have no idea what you just said. 😉
@444: As you wish! See above.
@Eric: Thanks for sharing that. I’m going to put a stop to this trading with emotion by NOT panic-selling. Even if I didn’t observe my own rules about buying, I am a buy and hold investor generally so I won’t break my sell rules without a good reason to.
@Frugal Scholar: I hope to depend on BRK retaining its shiny glory to the rest of the investors while I hold onto the stock. I’m sitting back to watch the roller coaster now!
@L.A.Daze: Thanks. 🙂 I was mostly kicking myself for NOT sticking to my strategy, AND buying when the price was so high. But that’s how you learn, right?
@444: Oooh! Good news!
@mapgirl: Oy, *scratching head* What ARE you going to do? I’m goin to hang onto it based on nothing but the conviction that maybe I’ll make more than $3 (after commission) if I wait and if it goes up more than a dollar more than I paid for it. 😛
@Funny about Money: Just under $600 and self castigation. Small price to pay. 😉
Carolyn: translation = GAH!!! WTH!
I see – well, as you know, you didn’t do anything wrong. I can see how you were irked that you bought it, and then for the next three days it did nothing but go down. Especially that drop first thing the next day. That was a doozy. But it’s back on track at $73.75 (according to Yahoo, and as of 4:03 PM.) My calculations show a rise of $1.34 per share since you bought it; multiply that by seven and that’s $9.38 ahead. Take away your $4.95 commission and that’s $4.43 gain for you (couldn’t it be just one more penny??) You could sell right away and after paying $4.95 to sell you’d be behind by a few cents, so I’d hang in there till you can get your money back. :oD Really, though, no one can criticize a Berkshire Hathaway purchase; Mr. 444 just bought some today.
Basically Warren Buffet says, ‘Don’t lose money.’ To do that, I need the share price to be closer to $80. (I bought it v. high before the financial mkt fiasco.) Since I still think it’s a long term keeper, I probably will not sell anymore of the remaining shares I have till they get over $80.
i also own BRK.B! i bought it this year because i want to go to the shareholder conference next year!!! it sounds fun. 🙂 i <3 warren buffett.