Loading ...Experience of Buying on the Way Down
As a long term investor in the gold sector I thought I’d share my personal experience thus far of what it’s like to buy and hold on the way down. I’ll share my purchases on just one of my positions: Yamana Gold. No, I’m not a high roller like some of you guys. But I’m doing this mainly with cash I can afford to lose.
This is a stock I first bought in January of 2014 at $9.00 a share. At the time, I thought it was a decent price because it was down from about $20.00 a share in 2012. As you know, Yamana went on to trade below $1.40 a share in January 2016. Brutal to say the least. But from the first purchase at $9.00, I was buying the whole way down, and reinvesting the dividends, so that in the end I am averaged in at $3.23 per share and currently up 39.99% and $768.40 on the position. This whole time I haven’t sold a single share of any gold stocks. I am holding out for a big pay day a few years down the road.
Interesting..thanks for sharing Neil
In hind sight and with the help of TA…you would have sold high and re bought low
Are those…fractional shares youre buying?
I think you might have done the right thing, or at least a right thing (depending on the ensemble of your holdings).
(Let me stipulate that I am not indicating where I think Yamana is on the spectrum from total garbage to the absolute best. In any case if I did, you might do well to ignore my opinion. I write with the presumption that you hold average or better than average stocks.)
In the 1990s I spent lots of time with my own TA, but personal/professional life changes forced me to stop. I just looked at the most simple-minded Yahoo charts after that. I was too busy to sell when I saw things turning down. It was too much of a pain to get rid of DRS and certificated stocks easily in the setting of my personal life–too tough even to think of selling often. Therefore I was in an intermediate position between you and those who sold near the top. I just sold some intermittently, knowing I should probably sell more.
Would I have made more money by being more attentive? Yes. By being attentive recently and buying lots of Spock rocks and my own gravel have I done well? Yes. Did I do well by selling some stocks, even aggressively at times, on the way down? Yes. However to the extent I simply held on to stocks I have avoided wasting extraordinary amounts of time, and more to the point, I avoided stressing myself out. I am now sometimes buying back stocks at higher (albeit ridiculously low) prices than when I sold them. I simply do not know that all the stress of paperwork (for accountants for taxes), getting brokerages to accept stocks in DRS or certification, devoting time looking at charts except to the extent I loved doing it was worth it for me. There may be different right ways, and you might have fixed on one of them, in my limited personal opinion.
But I don’t know.