OT -- responding to Wily:
Plenty of misses -- I hope I didn't give the impression that all I had were successes. But mostly I try to "cut my losses short." Example: I made my MSFT investment in 1988 when I was in the midst of the computer and online revolution (I was an early exec. at Prodigy). I finally woke up to the fact that I could see this revolution around me and I was an investor -- why wasn't I participating AS AN INVESTOR in computers and online services? I decided to put $20K spread over about 4-5 stocks. 100 shares of MSFT ($5400), 100 shares of SUNW, 100 shares of COMS, etc. I decided that if any of these started to collapse, I would liquidate it. All but MSFT were taken out within a year (should have stuck with most of these) -- so I lost (minor amounts) on all those other positions (remember, this was in the shadow of October '87 and the one-day 507 point or 20+% decline). I've lost track of all the splits in MSFT and the many times I felt like I should take profits (or that it seemed WAY over-valued). I did sell 100 shares at some point and took, I believe $10K off the table. But that one position (now 4,000 shares) covered many many mistakes. By the way, this same logic got me to invest (a very minor amount -- $600 -- just to keep track of the company) in AOL. My 10 shares purchased in 1994 became 640 in 1999 which I recently sold this summer to add to my more recent CMGI position.
I apologize -- I know this sounds like bragging; I just thought it might be worth sharing because I really believe the best path to achieving success in the stock market is to buy good ideas early in their corporate cycle, especially if it has good management and a chance to be a leader in a growing industry. As an investor, you also have the benefit of time (if you can take that long term perspective): if you can let your investment have some time for good management to build its business, the compounding effect can be amazing and very powerful. As an investor, probably the best decisions I ever made were the NO decisions -- just wait, be patient, don't sell. I don't even lurk on the SI thread on MSFT -- I don't think about MSFT on a daily or weekly basis.
ASTN, I believe, has all of these potentials and attributes (good idea, good products/services, potential to be a leader in an important and growing industry). I know it won't be a Microsoft -- it doesn't need to be for this to be a big winner. I buy stocks like this with the expectation of seeing 10X my investment. Some fail and I'll take my losses. Some do that well and a few exceed that performance.
Wily, back to your question: I made some bad investments in Charter Oil in 1979... bought it on a huge surge during the old oil crisis days. The EPS was going from nothing to $4.50. They had a huge refinery in the Bahamas but all of a sudden lost their source of oil (Libya). Saw my investment surge from $20 cost basis, rise to over $50, bought more on the way down and finally liquidated every share I owned (about 900) for a loss in the teens. Charter finally fell to the single digits. I'm sure some shorts made out like crazy! That experience showed me the problems when you are so dependent upon a single supplier (or government regulations, or other things outside your control). If I think of some other disasters (maybe my memory is just being kind and I've buried some of my more significant embarrassments), I'll either post or email them to you.
Oh, and more recently, I bought Global Crossing just before it got crushed with its attempt at a couple of acquisitions -- probably lost 15% in about a month on a $20K investment. Also made a stupid investment in FNCM -- should have recognized that there were few barriers to entry for mortgage bankers coming to the internet. Yeah, I've had some embarrassments, too. But even if your batting average is "300" -- if you let those successes grow and compound, they will more than make up for the losses if you cut them reasonably short.
Sorry for taking this thread off-topic. |
