January 18, 2020

20200118, Third Saturday of 2020

First of all, I am not advocating for anyone to invest in any particular stock. Do your own research. Make your own choices. I am simply sharing my own thoughts and experiences. The one recommendation I am making is downloading Robinhood, creating an account, and investing some small amount in something. As a bonus, if you use my link to join then both you and I will receive a free stock.


From next week I will try to come up with better titles for my blog posts. I wanted to be able to easily locate these first few weeks of 2020 in my archive. The easiest way to accomplish this was to include the date in the title. Unless the recent political stupidity in Virginia results in revolution and civil war, I am convinced 2020 will be a record-shattering year in the stock market followed by a dramatic correction. This is the moment in history when $20 investments produce millionaires while old wealth vanishes into thin air. The trick is to ride the roller coaster up and jump out just before the peak. Knowing myself, that won't be me. I'll be crashing right along with everyone else. But it's going to be one hell of a ride and I am greatly looking forward to it. 

This week was extremely volatile for my tiny portfolio. Keep in mind, my total cash investment at this point is $900. Anything below that represents a loss while anything above that represents a profit. I have decided to regard dividends and interest as no different than rising and falling values in price. Naturally, any accountant reading this blog is now convinced I'm an idiot. For the record, they're right, I'm an idiot, but this decision greatly simplifies my internal calculations. The only thing I need to remember is my actual cash investment regardless of how much I later add or withdraw. Thus, the warning in the first paragraph. And here is the chart for my portfolio this week:

Overall, I am down about $20 from last week, but I am still up by $33. I have to admit, there were some very tense moments this week when my portfolio fell far below $900. I was very relieved when it started recovering and finally closed above $900. Fortunately, between now and the end of the month I will be collecting several dividend payments and a couple of them are very helpful. 

Even if my portfolio had not recovered, dividend payments alone would have returned me to profitability. The main reason I bought Patriot Transportation (PATI) was to collect the $3 per share special dividend. For some bizarre reason, there was a huge sell off of PATI the day before the record date for the dividend. Apparently thousands of people felt $3 per share was not sufficient reason to keep their stock. This means thousands of people literally gave their dividend payments to strangers and did so while losing money on their investment. This constitutes a double loss for thousands of people. Perhaps eventually I will sell my PATI stocks at a loss, but not necessarily. As long as I receive more than $17.58 per share, I will at least break even. 

As you can see, I already have a "Limit Sell" order in place. If the price rises to $21.05 before April 16th, I will lock in a profit of $4.70, plus the dividend payments. That will give me a total profit of $36.20. Naturally, if the price doesn't rise, my profit will be considerably lower and I might even suffer a loss, but that's okay. It's been a good lesson and an interesting experiment. 

The only other stocks in my portfolio ending the week in a loss were my ten shares of Ford, but I love Ford automobiles and I have spent my entire life wishing I owned a piece of the company. Now I can honestly say, "I own Ford Motor Company." Granted, it's a tiny little piece, but I own it!

This is why I am encouraging everyone to download Robinhood, deposit a small amount of money, and buy a few shares in your favorite company. There is something deeply satisfying about owning something you love. We live in a free market capitalist society. This is nothing short of miraculous. For thousands of years in human history only a tiny handful of people had the privilege of participating in the economy. The rest of us were peasants and slaves dependent on the elites.

Be a capitalist. Download Robinhood. Buy some stocks. Enjoy the freedom and privilege of being a corporate owner. Don't hate corporations, own one!