Nerves of Steel

From July 31, 2008 to October 31, 2008, my portfolio dropped 30% when the economy suffered the double whammy of soaring gas prices and the bank/mortgage meltdown.

I listened for months to doom and gloom forecasts, experts saying 20 plus years for a recovery, no hope scenarios. How the credit crisis was going to bring down other industries. How it was going to snowball into all industries and companies worldwide. So, I did what any sane investor does in a down market; I bought more shares. After all, “buy low, sell high” was created in just this kind of downturn. I watched as my new purchases plummeted along with the rest of my shares, now down 36% at year’s end. But I had faith. I also had three things going for me. One, nothing was actually lost until I sold the shares, two, I was young and could ride it out, and three, I didn’t own any shares in the banking, investment or car industries.

President Obama was inaugurated. Stimulus packages were enacted like sandbags along the flood channels. Banks, investment firms, car companies were thrown life jackets. And still I sank. By the end of February, I was down 40%. With nerves of steel and a blind eye, I ignored my portfolio. I figured it had nowhere to go but up. I didn’t need the money, and I was 20+ years away from any kind of retirement thoughts. “Let it Ride!” I declared.

I took a peek the end of June and saw that my portfolio was back in the positive. Not by much, I add, but still. .09% was better than -24.2%. By July 31, 2009, I was firmly planted in Investors Heaven, showing 12.9% ROI. Little by little, each stock was climbing out of the red and into the black. By August 28, 2009 my ROI was higher than it had been before the year before.

Invest in good companies, invest for the long term, and HANG ON! It’s gonna be a bumpy ride!

Stocks2008

Reclaiming the American Dream

This is our time,…to restore prosperity and promote the cause of peace; to reclaim the American dream and reaffirm that fundamental truth, that, out of many, we are one; that while we breathe, we hope. ~ Barack Obama

These past 8 years have been trying, to say the least for this live-and-let-live liberal Democrat. Acerbating my sensibilities is the belief that despising the sitting president is counterproductive to contributing and living in a healthy society.

My first thought on hearing Obama’s victory speech was “Okay, a fresh start.” My second thought was “Great! A president who can string two sentences together and deliver them without leaning on the podium.” A sad observation, to be sure.

Like most everyone I know, the economic meltdown had a drastic effect on my portfolio. I realize I haven’t written about my portfolio since May and looking over the 6 month result since then has been an eye opening experience. That led to a serious eye closing experience and the downing of a bottle of aspirin.

I did manage to get rid of Usana, Ameristar Casinos, National Fuel Gas, Oneok, JP Morgan Chase, Tupperware, Petsmart and Quality Systems. Fortunately for me, I sold high. Then willing to test the other half of the investment theory, I bought low. I reupped my positions in Omniture, Marvel, Apple, Netflix and Whole Foods.

Now all I have to do is hope I have the time to see the restoration of prosperity!

stocks20081

The Positive Side

One month into the second quarter, and my stocks are looking up. Really though, how much worse could they have gotten?

As to be expected, my largest gainer is National Fuel Gas. With fuel costs sharply increasing, it is a nice change to be on the winning side of a price increase. Nat Fuel is also my only stock breaking the 100% ROI.

Getting ready to break the 100% mark is Marvel Entertainment. With the release of “Iron Man”, Marvel entered into the realm of self-promoted and produced movies. The financial success of Iron Man showed that this is not just a comic book company any more. And with 5000 comic book characters to use as potential movie ideas, I’m hoping this stock soars for years to come.

In other fuel related news, FedEx has been horribly bruised by the costs of fuel and the stock price reflects their continuing struggle. I will have to keep eye on their quarterly earnings reports. As I do not see gas prices dropping, ever, FedEx will have to redesign their pricing structure before returning to profitability.

Added to the chopping block are Columbia Sportswear and PetSmart. Both are good companies, but it is time to cull the herd. As soon as my limit priced is reached, both will be gone. Other wobbly stocks such as Usana, Cedar Fair, Ameristar Casinos will be added to the subtraction line as soon as they recover some lost ground.

GameStop was the biggest loser this month, but after searching for a reason why, all I can say is “emotions running high”. When people come to their senses, there should be a return to price normalcy.

In the meantime, I’ll just hope for substantial returns anytime before I retire!

stocks2008