My Best (and Worst) Stock Trade
When I had a few hundred dollars to invest, I was a pillar of respectability and virtue. Every dollar was a part of our future, and every stock was a piece of the American dream.
This is how it begins…
My first stock pick was my best stock pick. On October 26, 1988, I bought 100 shares of a data storage company called EMC, which traded on the NYSE for $4.125.
On May 1, 2000, my $412.50 investment in EMC was worth a staggering $340,438.98!!
(Note to self: OK, just do that again, repeatedly. Hmm, not so easy…)
In 1998, it took me 30 years to place my first trade, and today, it took me 30 seconds to place my 2,000th trade (which will likely not work out as well as that first one) so I am learning to place fewer, smarter trades.
My first stock pick was also my worst stock pick. On September 19, 1990, I sold my 100 shares of EMC for $575.01, realizing a 40% gain in two years.
Although it was encouraging to put that $162.51 in my pocket, it was even more discouraging to put the other $340,276.47 in someone else’s pocket, so I am learning that sleeping is often more profitable than trading.
Small wins can encourage us to add a little more leverage or risk or speed to increase our returns, but this sometimes only helps us to lose even more money, even more quickly, in even more creative and exciting ways.
Since I had a dependable income and a modest lifestyle, I could afford to “dial up” my leverage and risk and speed, and I survived some dramatic downturns in 2002 and 2008 and some dramatic recoveries in 2003 and 2009.
When I had a few hundred thousand dollars to invest, I was a gambler and a player. Every dollar was another lottery ticket, and every stock was a potential fortune.
... and this is how it ends. In time, I would learn discipline and patience and perspective.