Author Topic: Experimental Results  (Read 1443 times)

TheOldestYoungMan

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Experimental Results
« on: September 28, 2016, 08:10:38 AM »
Two years ago I started an experiment.

I set aside a small portion of my savings and began picking stocks based on the absolute best evaluation I could perform based on publicly available information.

So that's the best evaluation that I could perform, others could no doubt have done better.  Note that these purchases and sales didn't all occur two years ago, it took some time to do each evaluation etc.

I bought GE at $24.86.  Total of $2493.00 with transaction cost.
I bought T at $32.50.  Total of $1632.00 with transaction cost.
I bought CVX at $103.02.  Total of $4230.82 with transaction cost.
I bought HSY at $86.55.  Total of $959.05 with transaction cost.
And then the final one (which was just straight up gambling, no evaluation other than I like burritos) CMG at $473.00.  Total of $4737.00 with transaction cost.

I did eventually decide to abandon the experiment and sell everything, using the money as part of the downpayment for my first rental property.  I'm making this post to show two particular things.

1.  I wasn't in this for the long term.  So that's a violation of a very important principle in investing.  All of the above were gambling.

2.  Even if you could time the market, you won't.  You'll end up doing something else with the money and rationalizing any losses as just part of the cost of the new opportunity.

I knew this going into my experiment, but YOLO? right?

I sold T first at $38.96.  Total of $2046.97.  Woohoo made some money!!!
I sold HSY next for a total of $1016.40.  The very next day ( I mean it was soon after, maybe like next week) the price got bid way up from a takeover attempt, but that's just how it goes.  You miss the ten best days in the market etc. etc.
I sold GE for $3063.88.  Money money money MONEY.  Money.
I sold CVX for $4,242.25.  A brutal loss per share but it was covered by the dividend for a net gain before taxes.
And the last sale was CMG.  Held on as long as I could but took a $63.00 loss per share.  If I had waited another day it would have only been a $53.00 loss per share.  Needed the money for the other thing though.

So there it is, made about $400.00 before taxes off of about $15000 set aside for the purpose over 18 months.  After tax I expect it to be around $300.00.

Compared to just leaving it all in VTSAX (which is where it was before) I would have earned almost 3x as much (probably more with dividends but I'm not gonna go add all that up just for grins).

So this chapter of TOYM's hedge fund comes to a close.  Could have been worse.  Could have been better.  I did manage to avoid selling based off of emotions when a particular issue dropped.  I didn't manage to avoid buying for the same reason (see CMG).  I still believe that one is at the bottom!  But whatever, pretty sure I still own some of it in VTSAX...

redbird

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Re: Experimental Results
« Reply #1 on: September 28, 2016, 08:48:40 AM »
I wouldn't call it antimustachian (where you posted this thread) since you did still make money off of it.

Thanks for posting this though. I've never purchased individual stocks, so it was interesting to read your experience with them.