Tuesday, June 23, 2020

SmartMoney

I am always on a look to read personal financial blogs. There are a few of them out there.   Too many rushing to monetize, consist mainly of referrals, ending up having more advertising than the Super Bowl.  The others keep publishing very general information.  This make them very boring read to me.

 As I am doing my budgeting for the past 10 years. When I read personal finance blogs I can easily tell when expenses or investments are made up (fake).  You can see that they are unrealistic, not consistent with stock market movement, incomplete.  When I come across an interesting and active blog, which I would read I added to by Blogroll. There is no reciprocity, I use the blogroll as my favorites for financial blogging.  Here is an additional source of Early Retirement Blogs.  

 About 15 years ago financial blogs were new, easily gaining large number of readers. I was re-reading a blog of SmartMoney and one of the prominent bloggers who argued, that using Ben Graham's Formula, Discounted Cash Flow and Capital Asset Pricing Model Amazon shares were significantly overvalued at $33.  At the time the personal blogger had about $28K invested.  If he bought 850 Amazon shares, his nest egg would be over $2 million today without an additional investment.  

 About same time I was presented with my first ipod classic.  It was the time when Apple devices were still gay and for the first time, I felt what usability looks like. There was no need to explain anything.  Something told me that I should invest in this company but I didn’t.   If I listened to myself there would be no need to work for money now.  I had enough money to buy 10,000 shares at those prices, which is over $3 million today.

How you had hunches which you ignored and later  regret?


3 comments:

  1. I think any investor ends up with a laundry list of hunches that they ignored and end up regretting. Mine include:
    - being a computer nerd back in 1980 (when I bought a ZX80 and later a Sinclair QL), but deciding that when Microsoft did its IPO in 1986 it was overpriced and all the easy profits had been taken by those who bought shares before the float.
    - thinking that the internet was the 'next big thing' when Motzilla and html first came out but investing a pre-IPO internet company (GEM) that ran out of cash in the late 90s and didn't get to do an IPO before the dot.com bubble took hold.
    - thinking the share market was way overpriced in 2007 and, having decided not to sell my share holding (I didn't want to close my long term investments and realize capital gains) but instead bought index put options with a 9 month maturity timeframe in March 2007. Then when they expired in Dec 2008 I had trouble finding replacement options at a good price, so didn't keep the down-side protection in place - only to watch my portfolio tank during the GFC.

    Aside from these major snafus (any one of which could have improved my NW by a million or so if I done things differently), there are always myriad examples of buying or selling shares at the wrong time, and thereby making a loss or missing out of major gains once a position was closed out...

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    Replies
    1. Hello EnoughWealth!
      Thank you for sharing those. I am glad to hear that I am not alone pulling the remaining hairs occasionally :-)
      To be fair I still think that Microsoft and Apple are hugely overpriced. I can't explain that those company cost over a trillion dollars each. Maybe is justifiable for Amazon only.

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