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Competition Compulsion
Rating: 1.68 (19 votes)
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I'd like to propose a new Topic of the Week: How has participating in this competition changed your investing approach/strategy for good or ill? Has it changed your real life approach too or only what you do with your competition portfolio? As for me, it's been a negative in terms of my competition portfolio, and a positive in terms of the real investments I'm responsible for. Here's why: I was one of the people who said, "Watch out when the banks report." And I also said I was going to keep all the high flying foreign stock gains I'd harvested safely stowed in cash until the bank-induced crash happened. Was I correct ???? Yes !!!! Did I do what I said I was going to do? NO, I did not. Why? Competition fever. As I watched my ranking slip from 70 to 90 to 110 to 157, I couldn't stand it. Even though I knew I shouldn't and had written that I wouldn't, I did. I bought. And the predictable happened. I lost a lot of money. Ironically, I'm clearly not the only one who bought when selling would have been a better move or bought the wrong thing at the wrong time. During the worst of the bank-induced crashes I was away, busy with real business and family matters. When I returned last week I found to my amazement that -- in spite of huge losses -- I'd risen to 93 in the rankings. Nevertheless, every single stock I purchased when I shouldn't have has performed worse than the stocks I already owned and should have limited myself to. Hardly inspiring to write about them, though I will at some point because they still seem like good choices purchased at the wrong time. In the real family trust I'm responsible for, I stuck with caution, allowing the "unnatural" October run up in the market to lift the equity holdings to planned levels, but not investing any cash. What a surprise! The family trust, while down, has faired much better through these down times than my SLO portfolio. Yet when the time comes to buy in the family trust, what I've learned from all of you will help me make better and more profitable decisions on what to buy. | ||
Comments (2)
Eileen,
Mea Culpa.
Since the SLO Funny Money does not have the
'Ring of Reality to it - I have done some "excessive" Trading. Fiddling 'Round,
mainly. I call it "Noodling" - Busy for the
sake of Busy-nesss.
In this "Fast" market I, too, have done a few
"Jump-Shifts" to try to get in early on the "Next" Best Thing for "Competive" thrill of Victory / Agony of Defeat Motivations. Pretty Childish, huh? But it is for fun,Fun,FUN. Right.
You know, 'Scanning' and / or Floundering looking for the next 'In' trend or favored Sector to Emerge out of the Miasma of today's Mannic Market (Shake-out ?)
Actually for all the Volatility and Up-one-day-down-the next Movements and such - the Market might be said to be in some kind of Funky side-ways Lateral 'SNOW' Drift.
As for my Real Portfolio - No Way - same everyday - I don't Race & I don't Chase. I Plan my Work and I Work my Plan. I don't Panic over some Big Drop, especially when all boats go up and down in unison, so to speak - based on some 'News-related' PRETEXT. I can Smell the Man-ipulation there. Mind-Candy or Toxic Tocsins for the MindBlind and Desperate, mostly.
As I've said before, " I'm NOT responsile for the actions of that Lunatic - Mr. Market"
Don L. Ferk ( aka VikingWarrior )
Posted by don ferk | November 27, 2007 12:35 PM
Eileen,
I trade pretty much the same group of stocks in my personal portfolio as in SLO. Feeling for the bottom can be frustrating, I buy stocks that I think are dirt cheap and then they go down. At least with the two portfolios I have more funds to keep doubling down.
What I have been learning, or relearning, is about time and patience. Value investing hasn't been working very well this year, particularly for those of us who have been too optimistic about the housing slump.
At this point, it's "wait for next year."
Tom
Posted by Thomas Armistead | November 30, 2007 3:30 PM