Monday December 8, 2020 (17 days til Christmas)
Election Day -35
44 Days until the Inauguration on January 20, 2021
Yesterday I saw an article entitled “Don’t Chase the Vaccine Stocks” or something like that. This really pissed me off.
I don’t give investment advice. I tell people what I do. But I’m going to make an exception today and give you some investment advice.
DO SOMETHING!
Okay, that’s it.
Here’s the #1 Blunder most people make. Are you ready?
They DO NOTHING!
That’s it. Period. Full Stop.
Anything else I do or say is an expansion on the above advice and blunder to avoid.
I’ve been interested in investing since I was 18. I’ve made a lot of mistakes. Trusted people I should not have, etc. etc. etc. I have developed a strategy that works for me and I have from time to time told people what I’m doing in the hopes that they will TAKE CHARGE OF THEIR FINANCES!
Now how you choose to do that is up to you. You can let someone else do it or you can do it. However, in my experience NO ONE WILL DO IT BETTER THAN YOU.
You may question that, and that’s okay. If you let someone else do it then I suggest that you PAY ATTENTION. If you do it yourself realize that you are at bat. If you hit 4 out of 10 in baseball you are a winner. In other words, there will be losers along with the winners.
If you are interested in getting my emails about investing (not advice, just notes as to what I’m doing) message me with an email address and I’ll include you. In general I have found that – No one does what I do. Which is okay. Everyone must follow their own path.
Okay, with the above said let me tell you what pissed me off. Fischer Investments has an ad which I saw yesterday. They say they are better than most money managers and that if you have $500K come see them. They’ll charge you 2% to invest your money. You can do some spreadsheet compound interest to see how much 2% will cost you over time. If you don’t pay attention maybe they’d be a good way to go. They also say the biggest blunder you can make is to invest in one stock. More on that later.
Next I saw the article, maybe two articles, saying Don’t chase the vaccine stocks and you better watch out on vaccine stocks.
All that pissed me off. Why?
Well, okay, I get why it could be a bad idea to invest in only one company. If it goes south you’re screwed. A money manager would never do that because they don’t want to take that chance. Should you? Probably not. However, I think of a buddy of mine who put all his money in Apple when Steve Jobs came back …
But here’s the question I have for the “Don’t Chase The Vaccine Stocks” and “Don’t Put All Your Money into One Stock” folks.
My question is “Have you ever seen a situation like this?”
In other words, can anyone think of a situation in world financial history where the world faced a global pandemic and the solution is that the world will need to get vaccinated? Yes, there have been diseases and pandemics: smallpox and the 1918 Flu.
But here we have something that took over the world in less than a year. Now we have vaccines on the way. Is there anyway the makers of those vaccines aren’t going to be successful?
Yes, you say. The vaccine could fail. Ah yes, that was not my question.
If a company has a vaccine that works, can it fail? Maybe, there’s a way. I don’t see it. I see a huge potential. So I say take some money and invest it in the vaccine makers.
Back in the spring there were a lot of candidates. Too many to really follow for my taste, but I bought a little Moderna at the time because Anthony Fauci said it was very promising. I’ve found if I don’t buy the stock I won’t watch it. Therefore if I’m really interested I buy a little.
I had also pulled 30% out of the market in the spring anticipating a crash. In November as it became apparent that there were fewer candidates I bought in a little bit more. Over the course of the year I had bought some of the companies that claimed to have antidotes or a vaccine on the way. Some of them did okay. Some of them didn’t.
As it became clear that Pfizer and it’s German partner Biontech had a vaccine I bought both. It was also clear that Moderna had a vaccine similar to Pfizer and that it could be stored at a temperature that most people had facilities to keep as cold as they needed. The technology is new(er) and better than what has come before.
I thought Moderna would rise more than Pfizer even if both vaccines were similarly successful just because Moderna is a smaller company. I also bought the German company more heavily than Pfizer for the same reasoning.
I think about Davie Gardner of Motley Fool. He recommended Amazon five times in a row back when it first started. Many folks suggest that when a stock doubles you should sell half and then ride on the free money. Great I say, but what if you only invested a little at the beginning? How do you determine when you are fully invested in a company and should cut back? From the experts I get the “Ah there’s the art” speech.
I think about an old buddy of mine who said he had an uncle who liked to bowl. The guy had a huge hook in his form. The ball would teeter on the edge of the alley then curve in to hit the pins in the sweet spot. People would come up to him and say, “you know if you …” He smile and ask, “What’s your average?” They’d tell him and then ask his. “270,” he’d say. That usually ended the advice.
I am willing to put my average up against any advisor. Granted, it’s me and it’s a small account versus having to manage a billion dollars, and it’s taken me fifty years of dabbling and paying attention and understanding what works for me to get to where I feel comfortable even mentioning what I do.
PS Deflated manger scene with Jesus as Pumpkin Head.
I leave the investments to Allan.