That title looks a line from a Star Wars sequel. Nope. Today I acted on the informal and personal stock research I’ve been conducting since learning that one of the companies I was invested in is being bought out. Neophotonics (NTPN) was being bought out. I sold my shares then bought Solarwindow (WNDW) and Electrameccanica (SOLO). As I said last time, rather than buy only one, I bought a bit of both.
Why mention it? Because at its core, this blog is about personal finance and is based on my book Dream. Invest. Live. I wrote the book at the request of friends and with the recommendation of a world known best-selling author. People liked it, and told me I was able to simply describe a topic many consider to be complicated or at best boring. Thanks. Then the Great Recession hit, and my strategy continued to work; but too few wanted to read about investing when the market was crashing. Then I had my perfect storm of bad luck, which happened at a time when job and real estate markets were terrible. But.
Rather than quietly hide that reality, I decided to continue writing about the realities about my personal personal finances. One of the taboos I’ve been willing to break is to describe the good news and the bad, as compared to many pundits who make everything sound like a success without any hint of failures. It’s been a wild and difficult ride, and may become the basis of a sequel. So, why mention it? Because personal finance isn’t only about successes, failures will happen and shouldn’t be a source of shame, and the mundane steps between those two extremes should be shown in case others want to see at least one example of how investing can be done. And, of course, I am looking forward to celebrating successes, eventually. Let me check those lottery tickets.
For me, researching stocks isn’t drudgery. Each company is a story about dozens, hundreds, maybe thousands of people who also have stories. Someone had an idea for a company and decided to do something about it. Congratulations. The research helps distinguish each company from the others, one story from the other stories.
Those stories can be marvelous narratives, something that’s been apparent since Gates and Jobs and the thousands around them revolutionized our society and culture. Not dull.
As I do it, the research also involves data. Some only focus on the data. Some only focus on the stock price, regardless of the company. I prefer to look at the official data as required to be reported by the SEC. That’s looking back, and is proof of how they’ve managed. I also look ahead at the unofficial “forward looking statements” where people inside and outside the company project the company’s growth, the industry’s growth, and the technology’s growth. Why would any manager make that sound dull?
Solarwindow’s story builds off solar power’s long struggle to gain acceptance, and could lead into a new approach. Solar power systems are becoming so common that getting a system installed on your house isn’t as much of a novelty as a decade ago. Everyone I know who has a system likes it, especially on Whidbey Island where power outages are common. Even in winter, or during a late autumn storm like the one passing by as I type, it is possible to generate power. But all of those systems rely on opaque panels usually mounted on a roof or out in a field.
Solarwindow uses a technology that uses transparent materials called windows (radical innovation, windows are), to capture the sunlight. Instead of shiny (and possibly glaring) panels mounted on trusswork, a Solarwindow building might not look much different because they just look like windows. That’s appealing aesthetically, but also can keep land open and roofs clear of wind-catching obstructions. Besides, snow has to be brushed off panels but is less likely to stick to every window. While I am more interested in the story side about powering houses, the bigger economic benefit to the company could be office buildings which have much more surface area in glass than in roofing material.
Now, pardon me as I yet again copy and past the name of the other company. Ah. Electrameccanica. I think I’ll use their trading symbol, SOLO. Much easier to remember and spell.
Oh well, while the name is in the copy and paste buffer I’ll use it.
Electrameccanica is building and selling electric vehicles. This is a risky and adventurous time for any startup, that brief period when their products finally hit the market and reality measures whether enough people want what they are offering. Electrameccanica isn’t the only electric vehicle manufacturer, but the others have much higher market caps. I buy smaller companies so I can enjoy the ride as they reach those heights. Most are producing cars and trucks that are innovative, frequently with some tie to conventional chassis designs. Electrameccanica (still in the buffer) is willing to offer trikes, as well as sedans and work trucks. I find that encouraging because we’re experiencing a time when people by necessity are exploring new ways of living.
The surge in interest in electric bikes proves to me that people are already challenging old norms. The old convention involved using the family sedan that holds six as a way for one person to commute most days of the week. That will remain popular for many reasons, but the company may be profitable from those who to decide to swap out one car or replace it entirely with something more enclosed than a bicycle. The fact that the company is based on Vancouver BC is a great demonstration of using such a vehicle in a climate known for – well – messy weather making a mess of a person’s hair and clothes.
I encourage you to read the previous posts about the process that got me here. In it you can see how the decision could’ve resulted in picking other choices. Today was one of those that started with me slapping myself, but staying my course. I’d already sold NPTN and was going to buy WNDW and SOLO, but I caught a glimpse of some of the other candidates rising and falling – and teasing me and raising doubts about my decision.
There’s a central aspect of investing in stocks that I keep in mind, even if I rarely exercise it. Stocks are bought and sold every day. I bought something from Amazon the other day that I need to return. I can do so, but it is a hassle. If I decide to not own WNDW or SOLO, I can sell it much more readily. The price will have changed, but my ownership is easily shifted. There may be tax implications, but that’s a detail, not a lifetime commitment. I recall selling one stock that way and accidentally made a profit. Stock ownership is as much of a commitment as you want to make it. The stock doesn’t care.
A comment on one of the previous posts asked a good question about whether I’d researched this or that aspect of the companies. I hadn’t. There’s a middle ground between total guesswork and researching every employee, building, competitor, customer, et al. I do enough research to differentiate between the various stocks, buy, and not stop learning. Owning shares of a company makes it much easier to find the motivation to answer those deeper questions as press releases are released, discussions are held on discussion boards, and tweets go flying by. I look forward to attending stockholders meetings again because I’ve learned a lot by sitting in the back of the room and watching the finance types, the other board members, employees, and particularly the other shareholders as they react to the CEO’s and BOD’s comments. I can try to do so before buying, but trying to do that with a dozen companies can be a full-time job. My style of investing tries to do enough without doing too much.
The title of my book is Dream. Invest. Live. That was a purposeful choice. Dream – and not just about stocks. Live – because that’s how we know we’re alive. Investing just happens to be in the middle providing one, but not the only, bridge to get from dream dreams to living them.
December is only hours away. At the end of the year I will compile my semi-annual portfolio review. This year will have one less entry and two new ones. I don’t expect to do much more than watch the news on my stocks in the meantime. There’s a life to live, and that is more valuable than any portfolio.
Of course in this society values are a bit askew, which is why I invest, and work, and encourage you to buy my books! (Pardon the shameless self-promotion, but I do it so rarely that I hope you don’t mind.)
Now, to post this then rescue my three-foot tall Christmas tree that is sitting in its stand outside in the wind.
Trimbathcreative's Blog (Tom Trimbath) 