Individual Stock Picking Results After 2.5 Years

[disneysteve]

Why should we reduce our "risk" as we get older?

That's a very good question. Certainly, everyone's risk tolerance is different, so that has to play into it.

I'd say one thing that changed in our situation is that my income more than doubled over the last 2 years so we've been able to really ramp up the amount going into savings. As a result, we could still stay on track to meet our goals while also taking less risk and seeing less volatility in our holdings. If I can get where I'm going at 65/35 rather than 80/20, I'm okay with that. I just recently (a week or so ago) realized that the stocks had dropped to 61 which is a little lower than I want it so I am currently working to bring it back up into the 65-70 range. I reworked my spreadsheet to make it easier to see that info and track it better going forward. I don't see myself dropping below that anytime soon.

I think the bottom line is that you should look at your goals and invest however you need to to meet them while also taking no more risk than necessary to get there.

[rennigade]

Thats certainly a good run, but we're still in a massive bull market...which makes picking winners much easier. If you can produce the same results during the next recession, that would be legendary.

[LivingAlmostLarge]

Exactly beating the market in the recession then you might as well quit your dayjob and become warren buffet. The bull market has made it all easy. I will second that. I think that knowing what you have and preserving capital as you get older is important. When you can't risk a 20% drop. Of course if you have excessive amounts of funds then it wouldn't matter. But if you are living on the edge retiring with very close to "enough" and already living below poverty line like MMM followers living austerely because you want to. There isn't much you can do to cut costs nor save if you are "retired".

[Singuy]

Exactly beating the market in the recession then you might as well quit your dayjob and become warren buffet. The bull market has made it all easy. I will second that. I think that knowing what you have and preserving capital as you get older is important. When you can't risk a 20% drop. Of course if you have excessive amounts of funds then it wouldn't matter. But if you are living on the edge retiring with very close to "enough" and already living below poverty line like MMM followers living austerely because you want to. There isn't much you can do to cut costs nor save if you are "retired".

Warren Buffet doesn't win during a recession. He wins massively coming out of a recession. I follow his rules which lead me to the high returns.

1. Stick to something you understand (in my case tech).
2. Be greedy when others are fearful

My portfolio has been through multiple "recessions" already. Both AMD and TSLA had negative returns of large magnitude at one point or another. I had -45k or lower with AMD and with TSLA at least once in my account. But when you play with large numbers, believe in the company, and have very little care about paper losses, coming out the other end skyrockets the return which I'm sure Warren pretty much made his wealth this way.

In fact I have clearly documented my wins and losses with these two companies on this forum so it's not like I hide my losses and only shows my wins. I'm not sure how easy it is to pick multi-bagging high beta stocks during any market. In fact not one person here jumped on the wagon with me when I advocated a buy. So conviction is part of the story...since you guys had no conviction and was more loss adverse, even me spoon feeding these stocks to the forum resulted in no one participated. I mean it can't be any "easier" than that for you guys since I did the research and made my argument. My only success is prevented a guy from losing on Tesla.

[disneysteve]

My portfolio has been through multiple "recessions" already.

Your thread title says these results are from the past 2.5 years so you have yet to see a recession with this portfolio. Ups and downs of any individual company are not at all the same thing as I'm sure you know.

That said, I think you're right. You don't make the money during the recession. You make money in the recovery. Buy low, sell high, which is exactly the opposite of what the average Joe does which is buy when confidence is strong and prices are hitting daily records and then panic and sell when the market drops.

[Singuy]

Your thread title says these results are from the past 2.5 years so you have yet to see a recession with this portfolio. Ups and downs of any individual company are not at all the same thing as I'm sure you know.

That said, I think you're right. You don't make the money during the recession. You make money in the recovery. Buy low, sell high, which is exactly the opposite of what the average Joe does which is buy when confidence is strong and prices are hitting daily records and then panic and sell when the market drops.

High beta stocks simulate recessions of Index funds very well. You can have a year worth of gains of 30-40%+ and be wipe out and being in the negatives within 2 months. It's like recession on steroids. I made the argument to Tom that this prepares you for the next real recession as you become less and less phased by paper losses. In the beginning I would feel the hind-sight 20/20 burn. I used to want to sell when things are bad vs buy. Now I just end up doubling down my position and could care less. I take this as a training program..and that's why I welcome the next recession.

[Like2Plan]

Why should we reduce our "risk" as we get older? I know this is what's said by financial advisors but will you come out on top with that frame of thinking?

I doubt it will make a difference for you by the time you are ready to retire if you continue saving at your present rate (assuming you still keep your expenses low). But, then you could probably be in a 70% cash position and still be okay because chances are pretty good you will probably have saved a lot more than what you require to retire.

I think Warren Buffet said 90% S&P and 10% bonds for his wife if he should predecease her. I figure she could probably live off the 10% bonds to get her through a major recession.

[disneysteve]

I doubt it will make a difference for you by the time you are ready to retire if you continue saving at your present rate (assuming you still keep your expenses low). But, then you could probably be in a 70% cash position and still be okay because chances are pretty good you will probably have saved a lot more than what you require to retire.

Exactly, and why take unnecessary risk? If you can be 70% cash and have all that you need, why not do that?

Suze Orman used to say (I assume it's still true) that she is 100% in municipal bonds. If that generates sufficient income to meet your needs for the rest of your life, great.

[Like2Plan]

In fact not one person here jumped on the wagon with me when I advocated a buy. So conviction is part of the story...since you guys had no conviction and was more loss adverse, even me spoon feeding these stocks to the forum resulted in no one participated. I mean it can't be any "easier" than that for you guys since I did the research and made my argument. My only success is prevented a guy from losing on Tesla.

You are probably a lot smarter than I am, so I think I will just stick with the boring indexes. I used to do dollar cost averaging into individual stocks years ago. But, I got tired of all the paperwork. Also, I had a couple of stocks that didn't make it out of the last recession. I was buy and hold all the way and I didn't know when to quit. (At least when the stock gets de-listed from the exchange they get dropped from the index. )

DH and I kept one stock each, but those two are all the individual stocks I have to worry about and I like the simplicity of it.

[disneysteve]

In fact not one person here jumped on the wagon with me when I advocated a buy. So conviction is part of the story...since you guys had no conviction and was more loss adverse, even me spoon feeding these stocks to the forum resulted in no one participated. I mean it can't be any "easier" than that for you guys since I did the research and made my argument.

Would you take stock picks from a random guy on the internet?

I don't generally buy individual stocks. I do own a few but I've owned them all for years and they make up a very small part of our portfolio. It's just not how I choose to invest. I think the same is true for the vast majority of regulars here.

[Singuy]

Would you take stock picks from a random guy on the internet?

I don't generally buy individual stocks. I do own a few but I've owned them all for years and they make up a very small part of our portfolio. It's just not how I choose to invest. I think the same is true for the vast majority of regulars here.

Happens all the time..some family member, some teacher, some podcast, or some youtuber advocate x, y, or z as a good investment. But of course the individual needs to do the research to verify such things.

Historically, if you look at my posts before even getting into stocks..I looked at it as some kind of casino gambling machine. So for a generally conservative saver to pour over six figures into an individual company on this forum should give off an alert. Perhaps I may just be onto something. It was definitely not a blind pick.

I made an official thread, made my arguments, gave updates, told people my position, and now it's almost a 3x bagger since my recommendation. I wish there was another person here that can give me this kind of valuable information. Generally what I see here are trend posts. "Buy bit coin now! It's soaring!". "Buy Beyond meat, it's soaring!". "Short Tesla, it's going bankrupt!". I see very little fundamental research and people actually making a case for their picks beside "hey look, that's the trend right now, better jump on the wagon before it's too late!". All those posts would result in nothing but losing money. Beyond meat has crashed 30-40% since peak. Tesla shorting would of resulted in a 150% loss, and bit coin has always been a gamble..but feel bad for those who actually bought at 15-19k.

[disneysteve]

of course the individual needs to do the research to verify such things.

Definitely, and that's why I virtually never buy individual stocks. I don't have the interest, knowledge, or experience to properly and adequately research individual companies. I'm not saying there is anything at all wrong with doing so. It just isn't for me. I'm quite happy to see you and others who are doing it successfully. More power to you. I hope your future returns match your past returns.

[Petunia 100]

Currently I have a 256k gain on 424k invested. This calculated return is 60%, but actual return is of course much higher since I did not start day one with over 400k of investable funds. We had a taxable account savings rate goal of 65%/year and have met it, which is about 180k-200k/year toward taxable accounts. I have learned a lot and spend almost 3hrs a day doing research on my biggest holdings. I am a buy and hold kind of guy. Most manipulation I have done has cost me returns, up to 50% returns in fact so I stop manipulating stocks. I also don't use margins or play with options. I think from this point on I'll just add to more ETFs and minor amount of money toward my bigger holdings every month vs what I have been doing the past 2.5 years.

Individual stocks Portfolio from heavy to lightest. AMD+TSLA accounts for 80% of this portfolio.

AMD
TSLA
SHOP
VTI ETF
MTCH
AMZN
BZUN
ATVI
DIS

Wow! Well done.

[Singuy]

Today was a HUGE milestone for my individual stock investing endeavor. I finally hit 100% return on my money! 440k invested, 440k gains. Total portfolio now hits 880k. Buy and hold did the trick. Have conviction and buy when everyone's fearful.

Next milestone is 120k away, the 1 million dollar portfolio. Hopefully will get there soon

[disneysteve]

Next milestone is 120k away, the 1 million dollar portfolio. Hopefully will get there soon

As long as the bull market continues, we're all in great shape and watching our portfolio values climb. Of course, it will end eventually as it always does but it's been a fun ride.