Have done lots of thinking on "selling on lows" and "selling at 20% losses" and other stuff. It's been on my mind so much I've skipped a few lectures and just sat reading on end. Thank you for your sharing your thoughts with me. My conclusion to everything - it depends.
If you buy a stock knowing it's going to fall, that seems dumb to me. But people do it so they can start a position. Fine. I guess that's just a difference in techniques. If you buy a stock and it falls 20% based on new factors or reasons you don't quite understand, I still think selling is the right choice. If nothing has changed whatsoever and the thesis remains unbroken, then averaging down is the right choice. I feel that 90% of the time you have to do one or the other. Indecision is dangerous.
CUTR I bought long ago - ave price is $3.23/share. Now sitting on a 20% loss (how hypocritical of me!). Not selling nor am I averaging down. Maybe this is where it gets dangerous. Indecision has formed. Given that its broken into the 2s, I'm fairly sure it'll break into the 1s in coming weeks - it's the nature of the stock. If I had more funds, I'd be comfortable doubling down but there's only so many times I can double down and the market can be brutal at times. I learnt this the hard way with CMLS which is why I hesitate. Also, because I know this will take at least a couple of years to resolve I know I have time on my side. I don't want to act just yet.
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Onto another topic, I think there's value in (certain) real estate - I don't understand housing and I think (most) CRE is pretty terrible but MGM (has been mentioned on this thread a few times) and BKD (retirement homes) seem to be cheap - and there's a margin of safety. Will explain more at another time. Finally, Hyatt Hotels seems reasonably priced - it's neither value nor growth imo.
I also bought some PARAA shares - ave price $15.2. I like WBD and PARAA. Still holding onto WBD - nothing came up that was unexpected. What was unexpected was the rally pre-earnings. Sometimes the market is bizarre.
My REAL shares are up 65%. Unfortunately, I only bought 50 of them at $1.33. TA was quite useful here. This is also where I struggle. I estimate the value of the overall business (today) to be around $3; the future could be significantly higher. There doesn't seem to be much point in buying more. (I'm deliberately not sharing what I like about the company at this time.)
Also, averaged up on CCL - average price $12. As oil prices fall, CCL win - it's why I re-entered in the first place. A hedge to my long-term oil bets. I initially thought inflation would be the big threat; now I'm becoming more convinced its recession. All the papers, finTV and blogs I read/watch further agree - not to mention, China's struggles.
Bought into WWW again. I just skipped a month of trading in a range. You can decide whether it was worth it or not. Seems to have broken out despite their "weak" earnings. Recovery on? Selling off noncore assets, reducing leverage and sharpening the business ought to work.
HAS isn't classic value - none of my plays are - but I'm invested. If anything, it's expensive but management have unveiled a plan "Blueprint 2.0" that I think will work. Also, I really like Wizards of The Coast so I enjoy owning some part of the company - my immaturity, perhaps.
In addition to XOM, I also started a position in OXY. I see why Buffett likes it - sexy tax breaks.
To conclude, I don't think I am a value investor (I don't want to be, anyway). I don't think I'm a speculator. I don't know what exactly I'm looking for. My portfolio's just a mess of (what I deem to be) inefficiencies.
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I came to another conclusion - the market is pretty clever. Value investors like to say if you think of the stock as a business, have a longer-term outlook and think logically, you'll beat the market. Not true. The market sees through bullshit earnings, the market thinks longer-term than most ordinary people and most of the time, the market's correct. Experience counts for something, deductive reasoning, too, but even if you were an incredibly deep thinker with 50+ years of market experience, returns aren't guaranteed!
To me, investing is the pursuit of something unattainable. Returns can range from -100% to infinite and that boggles my mind. Even if every investment I touched turned to gold, I wouldn't be satisfied because there's always going to be another better, more innovative investment out there that I might not ever find. This idea is what keeps me so motivated to the point where I can't sleep, can't eat and can't leave my desk.
It's similar to how I was a few years ago with religion - I read everything and I felt empty for so long. I couldn't understand what the purpose of life was. My final conclusion was, at the end of the day, you need faith. God (if you believe in God) won't just appear in front of you and say "here I am." Once I had the closure, I felt peace.
Sorry for getting all philosophical but I think investing is the same - my mind is beyond restless. I just haven't found the conclusion to it yet - and I have a funny feeling it'll take a much longer time than it did with religion. I pose this question to you guys now - why do you invest? My economics course suggests that as people get older, they buy bonds (if at all!) and steer clear of equities (and riskier investments) - this thread is an anomaly.
I think, for me, it started as ego - I was so sure that I was super smart and that I could very comfortably beat the market. I don't know why I'm doing it now, though - despite everything being harder than anticipated, my motivation keeps increasing! My parents think I'm wasting my time - as do my peers and my professors.
Don't think I'll post again this week. Will just read all of the replies to this and then do some more reflection.
Kind regards,
Harshu Vyas |
