As the family’s designated stock portfolio manager, I have learned a thing or three over the past 20 years of market ups, downs and various other gyrations.
After the dot com bust of 2000, where the insane internet craze came crashing down (pets.com anyone?!), I’ve learned that stocks are like gravity, eventually they drop. And like a Phoenix, they also eventually rise again.
As a result, I became a committed bottom feeder. When stocks collapse as they’ve done several times since 2000, most recently at the start of 2020’s pandemic, I start buying formerly expensive stocks. I call it “going shopping”! Of course, no one knows exactly when and where the bottom will be, but you can buy little bits of stock at a time and keep buying as prices drop further.
Covid 19 offered another specific shopping opportunity. I decided to focus on stocks that might benefit from the pandemic-induced quarantine. I quickly bought Zoom after my first zoom meeting. I bought Teledoc (TDOC) after my first online doctor visit and I bought Docusign (DOCU) after realizing I’d need to sign important documents from home. I also dabbled in Covid biotech. As the great horse race to find a vaccine took off, I bought some shares of one of the dark horse choices being chattered about: Moderna (MDNA). All these stocks have done well and some spectacularly so.
However, just so you don’t think I’m clairvoyant, I don’t know what’s gonna happen next any more than anyone else. Here’s a doozy prediction of mine that failed spectacularly. Before Covid was a household name, everyone I know was talking about traveling and many were also cruise enthusiasts. Travel is a booming boomer trend and I determined to get in early. So, I bought Marriott (MAR) for land travels and Norwegian Cruise Lines (NCL)for the ocean voyagers late in 2019. However, once the pandemic started, no one was traveling anywhere and definitely not on a boat. As a result, those stocks tanked!
But again, I am a veteran bottom feeder so instead of selling my losses and nursing my wounds, I went back in and bought more of Marriott and Norwegian at depressed prices! Since then, these stocks have recovered some of their losses and hopefully, will soon be back in the black. And, I added to my risk by buying airlines like Southwest (LUV) and United (UAL) because, when Americans get the all clear to travel again….I’m outta here. And I’m betting everyone else will be ready to roll again, too.
Speaking of rolling again, I did miss out on a few Covid buying trends. For example, the rampant buying of mobile homes (WGO), exercise equipment (PTON) and athletic wear (LULU). Well, you can’t win them all. And you can’t be greedy.
In the last week, I also decided that this incredible, high flying stock market is ready for a pause. I don’t know when that will be but just to be safe, I started taking a little haircut off of some of my best stocks (selling 1-5 shares of each) to lock in profits. AND to have some cash on hand for emergencies or the chance “to go shopping” again when stocks eventually pull back. I wrote about my stock “diet” strategy recently here.
Stock Pickn Mama always recommends that you do your own research, trust your own instincts, never put all your eggs in one stock basket. And, always keep cash on the side for future emergencies or “going shopping” market opportunities!