It was only one week ago today that I published a post titled Big Wave Investing that discussed the great risks—and potential big benefits—of going big or going home in the market.
So let’s look at Inovio Pharmaceuticals (INO), the company I mentioned last week. We’ll give you a chance to assess the company’s fortunes this month as a means of showing you that it’s not a big wave, but a roller-coaster.
March 2….. $4
March 4…. $8.45 (up > 100%)
March 6… $14
March 9… $17.85 (up > 300% in one week)
March 10… $6 (down nearly 1/3 of of day before price)
March 12.. $11.93
March 13… $7.35
Those are some treacherous waters. A chance to win big and a chance to lose big. I did the latter. I’ll cop to it. The simplest rules of investing apply: buy low, sell high. Hogs get slaughtered.
Lesson learned. I just wanted it on the record. And no, Susie B., I won’t be going into any more detail than that.
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One thing I’d like to think I did learn from 2008 and 2009 and granted, I you may not want to take investing advice from someone who failed so spectacularly in the past week (had I not bought INO, my portfolio would’ve basically been unchanged from last Friday): What I learned is that there are few times, maybe none, when you have a better opportunity to make money than when the market is tanking. The keys are to 1) be in cash and 2) pick as close to the bottom as you can.
In 2009, here are just two companies and where they were at the bottom:
Sirius Radio (SIRI): January, 2009: 12 cents per share. Today, $5.65
Apple (AAPL): January, 2009: $13 per share. Today, $262.
The opportunities are there. Personally, and I’d love to hear from you, I don’t think we’re anywhere near the bottom yet. I’ve heard “whistling past the graveyard” this morning and I agree. The White House still is in the Denial phase of DABDA and the president’s minister (Kudlow, Mnuchin) are still appearing on CNBC and suggesting that we “buy the dips” because all they really care about is seeing the Dow go north and green. It’s not about reality.
Reality is that the shutdown of commerce is going to induce all Americans to spend less. Which is going to create a downward spiral effect, as well as stoking fear. When things shut down, people lose jobs and income. When people lose income, they don’t spend. And when they don’t spend, other industries are hit hard.
Couple that with what will be escalating numbers of cases diagnosed and deaths and, well, if this were an extremely turbulent flight from New York to Los Angeles, I think we’re still flying over Pennsylvania at this point.
So, for me, as much as I’ve taken some losses, I’m heading more into cash. And waiting for the pain to really arrive. Cuz it’s on the way. Your thoughts?
Oh jdubs, I’m so sorry! I take it this was an actual loss & not just a “paper loss”? Except for the couple companies (& their stocks) that were on life support BEFORE 2/20/20 & will surely not survive much longer (which means I will have total actual losses & not just “95%” in those stocks), the rest of my “losses” have been “paper” only. For now. Still, a THIRD down in one’s stock account in just 3 weeks is gut-churning. Can you top that? 😉
And speaking of gut-churning, while my advice is probably not of much use to you as I focus entirely on the long-term, I will mention that over the past 30 years (wait, 35!) that I’ve been investing (1st, mutual funds only & for the past 11 years, funds and individual stocks), whenever I feel like throwing up is THE TIME TO START BUYING! I’m not kidding. It’s why I have my current house. And why, at least until the past week, my eventual retirement was “safe” from the threat of living in a box under a bridge. And this past week, my gut has started churning! Especially yesterday. I think you may be correct that “the bottom” has not yet arrived but trying to hit that exact moment is something 99% of investors can’t do (I was lucky in 2008 but I ,er, followed my gut…). I started nibbling about 10 days ago. For the past 2 years, I added money each month to my stock account but bought almost nothing because I was convinced a CRASH was coming…eventually. By the end of January of this year, I thought maybe I had just been ‘stoopid’ & wasted opportunities. Well, I’m not feeling so ‘stoopid’ anymore.
I should also mention that I don’t feel the urgency to break into my Emergency Fund to buy stocks. This is a SIGN that we have NOT hit bottom. But, I think we’re close. As you know, the markets move on rumor & fear & what might be & not on the actual. If you wait till the “experts” on CNBC announce the bottom, we will already be on the way back up, by quite a lot.
BTW, there were FOUR “bottom days’ in 2008-2009 : Nov 19 & 20 in 2008 & March 6 & 9 in 2009. The markets went back up after 11/20/19 & until mid-January 2009 when they started on the way down again. Some stocks & funds bottomed in Nov 2009 & others not till those days in March 2009.
And, um, please don’t yell at me, but to clarify for others – AAPL did NOT really get to $13/share in Jan 2009. That’s the split-adjusted price. AAPL never got to $69. I know because I had a limit order in & it was never filled. I finally 1st bought into AAPL in 2010 at a MUCH higher price & that was after cursing myself for being so stubborn back in 2008-09.
Good luck, jdubs & to all MH investors.
Susie B.
I know it’s the split-adjusted price and you know it’s the split-adjusted price and so does anyone paying any attention. If I’d have typed “$69” I would have had to waste time explaining how the stock split and that the real price then is not correlated to the real price now. And I was hoping to save that time.
But now you’re just making me do it on the back end. So, thanks to you, no time saved. It’s not a week in which I need more annoyances. Please don’t be the “Told You So” guy when you know you don’t need to tell me.
In other news, just put up another post and you’ll see at the bottom of the post that I have some thoughts on the bottom. Of the market. We won’t get there until Trump speaks truthfully about the virus’ potential. As long as he continues to try to appease our fears, the market will tank. The disconnect between what he’s saying and what the facts are will spook the market.
Thanks. Always appreciate your comments. Just not when you make me do extra work.
Ahem, show of hands – does EVERYONE HERE remember AAPL’s stock split a few years back? I do think it’s confusing for folks. And I wasn’t “telling you so”, I was just clarifying for others who may be in remorseful grief (i.e. smacking themselves upside the head a few dozen times while screaming “APPP-PLE!”) that they missed out on buying AAPL for only $13/share in 2009.
And to paraphrase my late Dad – “a little extra work ain’t gonna kill ya; it makes you STRONGER!” 🙂