Semi Annual Exercise EOY 2019

Sigh. The too common refrain. Companies making progress in a rising market, but their stocks languish from too little good news, delays, or damaging tweets outside their control. 

Dream Invest Live coverThis is my regular exercise to understand what I own, why I own it, and whether I should buy or sell. My strategy is described in better detail in Dream. Invest. Live., my book written prior to but published during the beginnings of the Great Recession, or as I call it, the Second Great Depression. A perfect storm of bad luck (someone else’s assessment) I call My Triple Whammy imploded my diversified portfolio. This exercise was easy and encouraging prior to that. Since then, I continue the exercise because the exercise remains valuable. Rather than being deterred by the downfall, I’ve decided to continue. Life and investments can exhibit cycles. Down then up then down then up – maybe in 2020? Tracking my portfolio through the ups and downs is more valuable than only looking at the ups. The downs hold the more valuable lessons.

Personal finance has changed within the last twenty years. 

Discount brokerages are the norm. Look at the New York Stock Exchange floor to see that computers have more control than humans. Advantages of nano-seconds enter the competition between computers, leaving humans with our tenth of seconds reaction times lagging. Within the last few years, tweets swing markets and economies. Corporations have lower tax rates and are hiding more in tax havens while incomes stall. Traders, people who hold stock for seconds or at most days, may be impacted the most.

Investors, those who analyze a company’s financials, estimate value and potential, and buy or sell accordingly are potentially less affected. They work with trends that last months, quarters, and maybe years. Nano-second response times don’t change the timing of quarterly reports. The initial trades are affected as computers feed fresh data through ultra-fast computers, but the overall effects have time to accumulate.

Aside from traders and investors are speculators, individuals who work in uncertainties. Computers work in data. Speculators are more comfortable with what-if, could-be, assumptions layered on assumptions. If MicroVision captures 1% of the global display market, what is that worth? Speculators keep themselves busy with such considerations. Computers can conduct massive Monte-Carlo simulations, but judgment is required to produce a result. Humans still have a niche.

I prefer to be an investor, but my remaining stocks have fallen into speculative territory. High upsides, high risk, and little institutional interest because the computers can’t properly analyze unknowns – or are better used analyzing more concrete companies. I am human. I should work from my strengths, especially where the competition is weak. I feel weak currently, but I also remember feeling strong, strong when stocks with low prices and far-off potential finally succeeded. That’s when dismissive advice becomes congratulations on foresight. I don’t know if it will happen, but it can’t happen if I quit. Hence, the exercise continues.

Here are the links to the discussion boards I use. Those discussions are less philosophical and hopefully more practical. Feel free to comment here or there, and to pass along links to others. The bigger the discussion, the better the chance of valuable insights (as long as the trolls and flamers are moderated appropriately.)

Investor Village

AMSC

LCTX

GERN

MVIS

NPTN

The Motley Fool

AMSC

GERN

MVIS

NPTN

Silicon Investor

AMSC

GERN

MVIS

Reddit

MVIS

 

About Tom Trimbath

real estate broker / consultant / entrepreneur / writer / photographer / speaker / aerospace engineer / semi-semi-retired More info at: https://trimbathcreative.net/about/ and at my amazon author page: http://www.amazon.com/-/e/B0035XVXAA
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