Investing In Yourself – Using Pillars to Build Your Core | |
Setting Budgets + Saving for Black Swans | |
How to Open My First Brokerage Account | |
Diversify your Life (Mind, Body, Soul, + Investments) HOW TO SEARCH MY BLOG:  | Get Updates to Your Email When I Create A New Post:  |
All Falls Down - Foot Locker (NYSE: FL)
You gotta know when to hold them...and more importantly when to fold your hand. Funny, even an experienced investor like me doesn't always follow my own instructions. So, what does that tell you about the power of human nature and trying to change habits?? I "speculated" and bought Foot Locker awhile back and I rarely buy a stock as it is trending up but I was listening to a stock analyst break down the stock and tell me why it was going higher...so I took a bite. My human nature is to hold to see how things played out and it has NOT played out well for Foot Locker. They have had a number of forces working against them. The biggest being that they are one of the largest wholesale distributors for Nike. Well, imagine what happened to the stock when Nike earlier this year (I believe, don't quote me) announced they were reducing their reliance on their wholesale pipeline. Let's just say the stock did not respond well. To rub salt into my sore wounds, I bought FL in the high 50s, after Nike's announcement, we all saw the stock fall to the 30s. I began to plot my exit by making aggressive trades that would release me of my bad ill-timed investment. The only solace I had was I was making a very small profit off of these bets but they would expire, and I was still stuck with my position. I guess complacency crept in and for some silly reason I still found myself holding this stock. This is the epitome of the well-known Wall Street phrase "don't catch a falling knife" or a "dog with fleas". Pick your slogan, I did not follow my own gut and Foot Locker released their earnings report (aka their quarterly health check) and it was not good. A stock that had been trading around the 30s has now dropped below $20 dollars a share.
The beautiful thing about managing my own money is I have no one to blame...ACCOUNTABILITY. So, this is a post to show you the downs of investing, no one is perfect but a reminder to set your limits. I could have easily just have sold my losing position at 50, 40, 30 but I didn't. So now I will be forced to take a big loss. I will be using this stock to offset my gains this year but my goal like Warren Buffet says is to not lose money. I failed with this investment and the pain will teach me a life lesson. Cutting bait from things that bring negative frequencies, energy and darkness to your life is a must. I pride myself limiting mistakes and mitigating risks and you should try to do that in your life. The nice thing about stocks is you can set automatic trades that if a stock drops below a certain level it would executed. I guess my pride got the best of me...human nature.
No comments:
Post a Comment