When it comes to buying stocks, you can guess or have a hunch and do just as well as I might do. But you will run into the same thing we all do eventually -- responsibility. In business, I call this the RACI model. I want to know who is Responsible | Accountable | Consulted | Informed (RACI) for your investment decisions.
When stocks are up, most people that contact me are excited to tell me they were accountable and responsible for making that great trade. Accountable because they made the decision and responsible because they executed the trade in their brokerage account. However, I often joke people don't often tell me about the trades that don't work out. Somehow, that Reddit board, website, podcast, or anonymous tip doesn't come up. You saw my Treehouse (THS) trade in my last post. Of my 9 recent trades that one, missed the mark and I have to own it. I have to go back and do the work to ask why did it not perform as I expected. I stay accountable for my losses just as much as I do for my gains. As discussed before, I should have closed my trade as it approached $52 and was very profitable but I've learned a few things about myself through investing. I could have been in the movie Tombstone...I'm Your Huckleberry and don't mind a good shoot out. So I log my trades and how they perform to gather insight into my tendencies and thinking before I buy a stock, during the trade, and to understand my rationale for why I sold. Keep a diary, get in your feelings the learn from them. A good life lesson, don't keep making the same mistakes twice whether it's dating, managing money, or investing in stocks.
No Sign Posts - Draw a Map
One of my favorite shows is "The Walking Dead". It makes you think, could you survive in a world with no sign posts or GPS? You better draw a map and try not to fall in the mud like Gabriel did in the most recent episode I watched. My map for investing is my diary and I use it to go back and repeat successful trades which trains my brain...like machine learning. If you've done your work, you don't listen to the whispers in your head telling you NOT to trade on a bad day. You trust your research and the process.
So here are a few items in the news that I'm jotting down to help me with my next set of trades:
Real estate inventories are low and prices of homes are high. Existing home sales were up slightly in June and July and prices keep rising. Diary Note: Not excited to buy new property, but wonder if real estate companies like Zillow and Redfin are worth a look.
Data on people buying big-dollar purchases such as autos, fridges, washers, etc was up slightly. Next, I saw unemployment claims continue to decline setting a new low during the pandemic. I'm watching this close as the Delta virus continues to try and stall the economy. Diary Note: We as people are resilient so I'm watching Retail Stocks very closely. If you look back into my blog posts a year ago during the crisis, I'm searching my diary to see what I traded. Retail has been hit but it feels different this time. If we listen, like I posted last year and mask up and vaccinate...I think retail, cruise ships, restaurants and hospitality will thrive.
Extended Diary Notes:
I own Foot Locker (FL) and it just reported earnings (or it's quarterly health check). I think this trend will continue for retail, cruise ships, restaurants and hospitality stocks if we can all come together and do the right thing. Mask up and protect yourselves because it's the right thing for you, your family, and believe it or not...the economy.
