Nouveau Riche
October 21, 2010
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RELATED TICKERS: ATPG
, ANTH
, IDRA
I won't offer any real investment insight, this is sort of just a narrative about my life. I would like to send a shout-out to Portefeuille, Jakila, Eric Bleeker, Zzlangerhans, any many others for offering interesting commentary, blogs, and pitches that ultimately influenced my awareness and directed my focus.
Because I adhere to Buffett's mantra regarding never losing capital (I'll expound on this later in the posting), I couldn't bring myself to subscribe to any of the Fools services, but I managed to "win" a subscription thanks to TMF's generosity.
The prologue (from a previous post on TMF):
From an early age my parents have taught me to spend less than I make, and above all to save, save, save. By their example I learned to live well below my means. I remember as a child complaining about how I couldn't name a single peer whose household had the thermostat so audaciously set (even during the blistering Texan summer). All my clothes were hand-me-downs, or purchased at clearance prices. We never had a T.V.
Despite this, I never felt poor. Even though I have many siblings, all of us had our higher-education costs covered in full. Books, living, study-abroad costs were all generously covered by otherwise miserly parents.
At age 16 I landed my first part-time job (It was either that or endure the sweltering summer heat at home) and began working as hard and as much as I could. I put everything into a savings account. A little while later my father co-signed with me for my first discount brokerage account with E-trade.
MCD (my first stock, corresponding with my first job), MO, PM, KFT (I actually only purchased MO but held on through all the spin-offs), KO, PG and JNJ soon became mainstays in my fledgling portfolio. I began also ti find peculiar ways of making money - arbitraging mis-spelled magic-the-gathering card listings on eBay, buying and selling digital items in MMO games, setting up an old slot machine at a friend's parent's poolhall, and underhandedly collaborating in poker games. The latter two were made possible by my proximity to numerous Indian Casinos in neighboring Oklahoma.
With a couple of heaves a snowball began to take shape. I would probably describe myself as fairly risk adverse, always adding to my existing value positions rather than going for an 'overnight riches' sort of pick. I may have deviated a bit with my latest (new) positions in ATVI and GS (today).
I have no debt (good or otherwise), I'm 1 semester away from graduating from UT(exas). I work year-round while I study, and I'm lucky given that I have the luxury of saving all that I make because my costs are covered by familial benefactors.
I just crossed the 30k USD mark in April, but have fallen under a little bit recently. I turn 22 this coming December.
Fast forward to today, I am currently sitting on a 49k USD warchest. I've had a spectacular run these past 3 months (+24%). I feel accomplished considering I am still 21 years old, still in school. I owe this mostly to being more active on Motley fools (and depositing every penny I make part-time). I think every security I've invested in in the last 3 months has been brought to my attention via a member's post or blog, or site article. I simply sort through the noise and ultimately decided which companies were worthy of my capital.
Suffice to say, my strategy has changed. After talking to a few members about it, I am convinced that my sprightly young age allows me to take on some volatility. I have fully divested many of the blue chips (such as MCD) that ferried me safely past the dire straights of the subprime meltdown/financial crisis.
I think most people would find my existence very miserable. I eat very plainly (the correct amount of macronutrients, no junk food), I exercise, I go to class and study, I work as an academic tutor, and then I sleep. I do this every weekday, and on weekends I do deep research for the coming week. Very rarely do I have time for "leisure" and although people seem attracted to me initially, I have a hard time holding on to (non-investing-interested/business related) friends - i.e. the kind you get sh*tfaced with.
What spurred this post was a cathartic experience I had today.
A group of new friends invited me to go camping over the weekend. I consented until they brought up how much each person would have to contribute monetarily for gear, food, recreational stuffs, the campsite, etc. Not wanting to spend money that I didn't "have" to, I demurred. This seemed to offend them somewhat.
I realize that this is a situation that is constantly resurfacing, and probably why I don't have a large number of friends.
"Want to go clubbing?"
"Sure"
*we get there and I find out there's a $20 cover to get in*
"Well that sucks, I hope you guys have fun!"
The good thing is I'm perfectly happy with my mode of existence. I feel somewhat reassured after reading the Snowball, Walden, and Daisy Miller.
Warren Buffett, Thoreau, and Henry James are kindred spirits. They turned out alright even with their quirks.
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