Individual Stock Picking Results After 2.5 Years

[Singuy]

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

[bjl584]

That's a good run.

Time to sell a few of those shares and take some gains?

[corn18]

Dang, I could retire today if you were my financial advisor.

[Singuy]

I haven't been exactly quiet here on the forum about AMD and Tesla you know. Shared my research and argument to you all, especially when these companies were at a lower than expected stock price.

[Singuy]

That's a good run.

Time to sell a few of those shares and take some gains?

Nope, being taxable accounts and Trump's small business tax cuts having no phase out and a hard stop at certain income levels, I need to continue to hold. It's probably one of the main reasons why never take profit which ends up better for me in the long run. My price target for AMD is at least 70/share and Tesla is in the thousands. Time frame for AmD is 2 years out and Tesla being 5-10 years out.

[Jluke]

You could always donate the shares. I think it is referred to as DAF.

good job stock picking.

any plans to minimize tinkering based on what you have experienced thus far?

[Singuy]

You could always donate the shares. I think it is referred to as DAF.

good job stock picking.

any plans to minimize tinkering based on what you have experienced thus far?

Yes I am planning on focusing future investments on index ETFs, didvided appreciation funds, maybe some tax exempt stuff. Also pour more money into real estates like peerstreet.

[disneysteve]

AMD+TSLA accounts for 80% of this portfolio.

What percentage of your total financial assets (not including primary home) does this represent?

You've done very well, which is great. But I can't help but point out that you've done it during the longest bull market in history. A rising tide lifts all ships. What happens when the tide turns? Are people going to keep shelling out huge amounts to buy Teslas when their portfolios are dropping 30 or 40% or more? I don't know what everything on your list is but how will the next recession impact each of them? DIS will certainly suffer. I'm a buy and hold guy, too, but I'm not nearly as concentrated as you are.

[Singuy]

Total taxable portfolio is like 70%. Total overall is about 40%.

DIS is like less than 1%.

I welcome the next recession so I can buy more. Lost the opportunity last time because I was too busy paying off my house.

As long as these companies doesn't go under, I'll be okay. Actually even if I lose this entire portfolio, we will be okay. Took us 2 years to save up 400k..losing 2 years of savings at 36 is a blimp in our financial roadmap.

[disneysteve]

Total taxable portfolio is like 70%. Total overall is about 40%.

DIS is like less than 1%.

I welcome the next recession so I can buy more. Lost the opportunity last time because I was too busy paying off my house.

As long as these companies doesn't go under, I'll be okay. Actually even if I lose this entire portfolio, we will be okay. Took us 2 years to save up 400k..losing 2 years of savings at 36 is a blimp in our financial roadmap.

Fantastic! In that case, you are in a great position going forward. And I totally agree about seizing the opportunity that will present itself with the next big correction.

[LivingAlmostLarge]

I agree I hoping for the next recession. I'd like to pick up real estate and stocks. We invested heavily in stocks and it paid back in spades. But I'd like some real estate. In 2001 when 9/11 hit I had no money. My co worker grad student his girlfriend was working full time manager for clothing company. She made probably around $100k. We were making $22k (and jointly my DH made equally). Sigh. So anyway he began buying airline stocks for literal pennies. United, American, etc. In five years it paid back in spades. He flipped that into more investments while we were in grad school. After we finished phd he went on to his mba. Last I saw he's racking it in millions in private investment firm. Oh well. I wish I had been able to listen to him then.

At the time he told me, look you won't get rich in academia, but if you are going to do it, invest every penny when the market drops. Be brave when everyone else is fearful even just an index fund. You'll come out so far ahead you'll subsidize your poor career choice. I did it more in 2007/2008. I recall looking at our statements and the balance kept going down the more we invested in 401k and taxable accounts. I recall investing like $50k and seeing $17k balance. Now well we've invested I calculated a little over $600k and our portfolio is around $1.4m and that's taking into account a $100k+ loss on oil from my husband playing with some fun money on oil commodities trading in 2012-2014. He stopped after oil started tanking and he kept buying on the way down.

Right now we probably have around $200k in individual stocks bought a long time ago. Disney being one. We used to own Marvel. We had more time before kids. Anyway now we hang onto the stock just because and I pretty much buy etfs. Honestly I mostly stick to VTI.

[disneysteve]

I agree I hoping for the next recession. I'd like to pick up real estate and stocks. We invested heavily in stocks and it paid back in spades. But I'd like some real estate. In 2001 when 9/11 hit I had no money.

I'm kind of hoping for another housing crash to buy a place in Florida. Last time around, we weren't ready to do that financially or stage of life-wise.

As for investments, we've been steadily trimming back our stock allocation (now at about 60%) and building our cash position so we should be in pretty good shape when the next down market hits. Our portfolio won't take as big of a hit as when we were 85% stock and we are sitting on more cash that we can use to pounce on whatever opportunities present themselves whether it's a down payment on a house or something else.

[Singuy]

I'm kind of hoping for another housing crash to buy a place in Florida. Last time around, we weren't ready to do that financially or stage of life-wise.

As for investments, we've been steadily trimming back our stock allocation (now at about 60%) and building our cash position so we should be in pretty good shape when the next down market hits. Our portfolio won't take as big of a hit as when we were 85% stock and we are sitting on more cash that we can use to pounce on whatever opportunities present themselves whether it's a down payment on a house or something else.

mathematically it's always better to dollar cost average than timing the market.

I have a friend who thinks Dow breaking 20k is a sign of over buying. That in conjunction of recession looming, he decided to time the market. So now dow is 26k after 2.5 years since then. If there is a recession in 2021 and Dow drops from 29k down to 22k..then congrats, you have done nothing but lost money due to time decay, losing all the dividends for reinvestment and 2k of potential gains. Also not a single person bought their entire position at 29k, so the average between 20k to 29k run up from dollar cost averaging is 24.5k cost basis. So essentially your loss is not that bad vs the other guy, who most likely couldn't time the bottom, ended losing on the dividend and has a cost basis similar to yours.

The only people who win timing the recession are the one who got it right under 6 months time.

[disneysteve]

mathematically it's always better to dollar cost average than timing the market.

Absolutely. Just to be clear, I didn't alter our asset allocation as a result of market timing. I did it with intent to reduce our risk level as we are marching toward retirement. And I didn't go selling off a bunch of stuff (I did shift some assets in retirement accounts where there was no tax implication). I mainly did it through redirecting new money.

I'm not a market timer either.

[Singuy]

Absolutely. Just to be clear, I didn't alter our asset allocation as a result of market timing. I did it with intent to reduce our risk level as we are marching toward retirement. And I didn't go selling off a bunch of stuff (I did shift some assets in retirement accounts where there was no tax implication). I mainly did it through redirecting new money.

I'm not a market timer either.

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?

Lets assume you have 2 million in stocks.

It took 2 years to hit the bottom of the recession and 2 year to bounce back..so within 4 years your withdrawal rate averages to be 50% of the actual dip. But then 4 years after that your 100% stock portfolio will knock the person who reduced risk out of the park. This is assuming you didn't withdrawal a million after your stock was down by 40%. You would only take a little at a time averaging down.

If you withdraw 100k/year from 2 million cash, after 4 years you end up with 1.6mil, after 8 years you have 1.2 million.
If you withdraw 100k from 2 million stocks, after 2 years you have 1 million(cause your stock crashed and you withdrew 200k), the next two years you have 1.2 million after 200k withdraw(gains minus withdraw)), and 4 years later you have 1.8 million (1 million gain - 400k withdrawal). You will be sitting on 2 million in stock by 2020 including withdraws. while the cash guy is hitting less than a million.