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the market can be pretty forgiving

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March 23, 2009 – Comments (1)

I've made tons of mistakes since starting to manage my own money last december.  And I mean tons.  Some of them classic, bonehead mistakes.  Some of my highlight reel:

1.  I bought Textron (TXT) for $16.  I doubled down when it dropped to $12, and held it as it went back up to $16...  I added at 9, I added at 8, I added at 7.. only to sell it at $7 for a tax loss to offset gains from another trade.  Talk about catching a falling knife. 

2.  I took a huge stake in DOW when it hit a 20 year low at $15.  only to watch it go to $7 before selling it for a tax loss to offet gains from the same other trade.

3.  I dollar cost averaged my way into MTW with an average share cost of about $6.xx . I held as it hit 4.  I sold at $2.87 after a small pop from $2.50, taking a bloody bath and then some only to watch tha thigh beta ticker fly upward.  Left a good solid 70% gain on the table in a week there.

4.  I sold HWD before a 50% pop

5.  I DIDN'T sell, trim, or hedge OSK for $9.xx when my average was $7.xx and watched it go to $4.xx

6.  I caught falling knife after falling knife after falling knife.  Sold some low, too. 

7.  I sold calls on C for $2.50 in march and saw alot of my shares go bye-bye when that thing all of a sudden rallied like mad. 

Mostly I was dumb, except for a few smart things

1.  I bought underpriced value stocks that weren't in favor (classic dremman / buffet / etc. contrarian stuff)

2.  I had alot of NCX

3.  I bet half the farm on financials, insurance companies, and BDCs around the early march lows and those have been rocket stocks since.  I postd about hwy I was doing this in my blog in very early march.

So mostly dumb, a little smart, and .... drumroll...  I'm nicely up with the market still down more than 10% from when I started. 

And that, folks, is a fun time.  Peter Lynch once said you don't have to get even 1/2 of your picks right to make money investing in stocks, and he was right. 

Remember, things can and will change, things can and will turn around, and what is today will not always be.  study options and hedging strategies and pick your stocks carefully, and then be patient.  So don't sweat it if you screw something up, or if you're stocks drop for a while... 

And also, the time of buy and hold isn't gone, as I see it, a new golden era of buy and hold is beginning as I type! 

1 Comments – Post Your Own

#1) On March 24, 2009 at 12:55 AM, Seano67 (82.64) wrote:

Everybody makes mistakes. My biggest mistake was buying in too early, off the October and November lows, figuring that surely a holiday rally was in order. Oops....  

 

I bought far, FAR too early into:

Burlington Northern

Diageo

Gerdau SA

Leucadia  

These stocks have all tumbled precipitiously from the prices at which I paid for them, and I have taken some fairly heavy losses on them all- which is disappointing, because these are all what I would consider to be very high quality companies....which is why I bought into them in the first place. So, I'm not sweating the losses too much. I know these companies will all be back.  

 

On the plus side of the ledger, I've done very, very well with:

Yamana

Transocean

PVD

Petrobras

SID  

 

I've pretty much treaded water with Bank of Nova Scotia and TKG, and steadily added to my holdings in NAT. All of these companies here, I plan on holding for the long haul, unless something is to very drastically change in my style of investing. I just think these are all excellent companies with great futures ahead of themselves.  

 

In the category of 'I Have No Idea, We'll See What Happens', would be:

Barclays

Lloyds

Deutsche Bank

Allied Irish

Banco Itau

Banco Santander  

All of them international financials beaten up all to hell, all bearing varying degrees of risk, and all bought very cheaply (but for the most part, I still bought in too early)- so I will keep my fingers crossed, hope for the best and see what happens with these guys.

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