6 Lessons learned in my brief stock portfolio history
moneyrelations :: Nov.15.2007
Hello, stranger! New here? How about subscribing to my RSS feed? Thanks for visiting!
I’m finally making progress in my financial maturity by exercising discipline learned from my investing experiences. Interesting things are happening in my stock portfolio and also for the stocks I have on my watch list – some good, some bad, but I’m not phased at all. I allocate 5% of my net worth according to the active management component of my plan.
My portfolio includes:
Enbridge Inc. (NYSE: ENB, TSE: ENB)
Forest Gate Resources Inc. (CVE: FGT)
Kraft Foods Inc. (NYSE: KFT)
Reitmans Canada Ltd. (TSE: RET.A)
Wi-Lan Inc. (TSE: WIN)
Enbridge, Reitmans and Kraft are all part of my new commitment to buying quality companies. I’m up on Enbridge but who cares? It’s not like I’m selling. I’m down on Kraft and Reitmans, but who cares? I will keep on averaging down.
Lesson 1: There’s comfort in investing what you believe in.
Wi-Lan, a patent licensing company, recently sued 22 companies for patent infringement. Names on this V.I.P. list include Apple, Acer, Gateway, HP, Broadcom and D-Link. If they can reach a settlement with one of the big names, I’ll consider myself lucky and escape maybe even with a profit.
Lesson 2: I should never have invested in something I have no hope of understanding.
Another mistake I made was with Forest Gate. I was young and stupid, mesmerized by diamond penny stocks and I’m down 60%.
Lesson 3: I can still salvage some money and put it to good use in a better investment.
My stock watch list is composed of stock oddities more than anything else. I take perverse pleasure in their failure or agonize over “what could have been”.
My watch list includes:
Tahera Diamond Corp. (TSE: TAH)
Timminco Limited (TSE: TIM)
Lululemon athletica (NASDAQ: LULU, TSX: LLL)
Another one of my diamond plays was Tahera Diamond Corp. I still keep track of this company because it’s just a trainwreck!
I finally got out at .45c after losing 85% of my investment. It is now trading at ~.20c after reporting a loss of $143 million over the first nine months of this year. I’m flabbergasted this is still listed on the TSX.
According to an analysis in a CBC News article, the Jericho diamond mine should never have gone into production. Really? Not according to the analyst reports that I read prior to buying my shares.
Lesson 4: Be careful of hype and analysts can get it wrong too.
I did put lesson 4 into practice as I did recently make money on Timminco, a solar power play. I had bought at $5.87 and sold at $15. However, based on volume and momentum, I should have held on longer as it did go to $18+. This nags me a bit but taking a profit is never a bad thing. It pulled back a bit towards $12 after a Q3 report of losses but it has recovered to $14.
I’m taking a wait and see approach on Timminco to gauge if I should get back in. I think there is still tremendous upside to this company – it just scared me going up way too fast (52-week low at .23c) without full production numbers to back it up. And I still know nothing about high-grade silicon.
Lesson 5: The number 1 rule of investing is the preservation of capital. It’s okay to take profits and be happy with it.
Finally, Lululemon is a company I’m following because it’s Canadian. I didn’t buy at IPO because I thought it was too expensive – its clothing as well.
Lululemon was in the news yesterday as its VitaSea line of clothing was busted by an investor shorting the stock for not having the promised seaweed in it. You don’t say?
As reported by the New York Times, the product tags boast that the VitaSea fabric “releases marine amino acids, minerals and vitamins into the skin upon contact with moisture.”
So if you wash it, do you get seaweed soup? Do you dry clean this thing? And how long does this potpourri of marinade goodness last?
Of course, Lululemon is blaming the fabric supplier and it remains to be seen whether this bad publicity will hinder Lulu’s long-term success. People still rave about the comfort of the clothing and the way it makes your ass look so it might not affect the die hards.
Lesson 6: This time, I learned not to fall for gimmicks.
Despite being a noob investor, I’m beginning to learn from my mistakes. It’s no good if your Bay Street/Wall Street education doesn’t pay for itself.
Investing ::
3 Comments »
Did you enjoy the post?
Subscribe to Money Relations and the Comments as well.
Share in Social Media
Related Posts:
It looks like your well on your way to financial freedom. It also never hurts to take a profit.
I share your same concerns about Timminco; I had my eye on it down in the $4 dollar range, hoping to grab some shares at a lower price and then wait until 2008 when they would hit their projected production numbers but to my chagrin, a few analysts started mentioning it and off she went into the stratosphere. Even though it has dropped some from the top, I still think its overpriced so I’ll watch from the sidelines for now. Perhaps I missed this one but maybe I’ll catch the next hot stock.
Thanks, WE. I’m trying hard but I hope I don’t fall into the pitfalls of trying to speed up the process
I know what you mean about analysts. I bought WIN and TIM due to Peter Hodson’s BNN recommendations. While I will come out ahead based on my TIM profits, I can’t wait to get rid of WIN and FGT. I just want a clean slate.
Thanks for dropping by. It’s always nice to have feedback from readers which also allows me to check out your blog
[...] Relations presents 6 Lessons learned in my brief stock portfolio history — A new investor offers some basic investing tips in the form of mistakes to [...]