Today morning I woke up very early, feeling totally positive and confident that this day will be “my day”. Yeah baby. The world is mine. Yep, FU Tony Montana… Today the world is mine.
So I opened this huge window which is almost as big as the entire outer wall of my little flat, let the fresh Berlin morning air enter this little kingdom of mine, launched YouTube and sang along “Good morning, starshine” (OST from the motion picture “Hair”; beautiful song, one of my favorites; make sure to check it out).
Why all this enthusiasm? And what’s the deal with FOMO? Well, as I already wrote, since April or so I’ve been more or less actively trading on the stock market. You know, buy low, sell high. And it worked for me so far.
And as of yesterday evening I had only a handful of stocks in my portfolio:
– Cisco Systems which I decided to keep when it dropped 22% after last earnings in August
– Nokia, which was supposed to be my long-term 5G play but it became my trading cannon fodder (which, unfortunately, I bought right before it tanked from ca. 3,60 EUR to ca. 2,70 EUR) and
– Varta AG, which had earnings report scheduled for today.
Now, there was all this hype regarding Varta for at least three months i.e. since their last earnings (Q2 results presentation). Everybody was like: price per share is about to explode: two fold, ten fold, whatever.
And I believed the hype. Not to a 100% but I was carried by the optimism of the others. A friend of mine (who’s opinion I respect a lot) warned me once that there might be a bit too much hype built into this Varta AG stock and that it might retreat very soon… and there are the short sellers, too, pushing the price downwards.
So I was unsure what to do. Believe all the hype in the discussion boards? Or trust my knowledgable friend? I thought, come on, his crystal ball could be just about as good as any other…
Therefore I decided to do the following: purchase Varta stock BUT sell before ER (earnings release). Ha! Just how cool am I? Sometimes share price goes up right before the earnings (and sometimes plunges right after the results are announced).
And that’s exactly what I did. Purchased a few shares and sold at a small profit yesterday evening, a minute before the market closed. Yay! 🙂
The whole market setup, stock movement and my gut feeling was very similar to that August evening when I failed to sell the shi**y Cisco stock, which made me a major bagholder ever since… You see, when every mom and pap are discussing a stock in various trading discussion boards and looking forward to the big surge after the ER, but the stock itself is reluctant to move up – then you know something is fishy. Ok, I’m lying. You can never know how the stock markets will react to ER, otherwise there would be many more billionaires than there are now. But, from my humble experience, that’s a good indicator.
So I sold bloody Varta stock yesterday evening and today morning I woke up with only Cisco Systems (my current gains from this stock are at -1.500 EUR; yep, that’s minus 1.500 EUR) and Nokia (with an avg. purchase price of 3,17 EUR and a sell order standing at 3,185 EUR).
And this is where FOMO comes into play… FOMO stands for “Fear of Missing Out” and it is probably the biggest psychological challenge for anyone who’s into trading or investing. I woke up extra early today, to read the Varta AG press release which was so ridiculously positive and hurried to buy 30 shares at any price (‘knowing’ or expecting that the stock will surge after such a positive earnings release).
Ok, but, was that all? Unfortunately not, dudes and dudettes… read on…
The stock did surge at first. Bam 💥. But then… I got greedy beyond comprehension and I sold all of my Nokia shares at a huge loss in order to purchase more Varta AG shares (which in the meantime already went up by an euro or two…). Wooohooo! I’m in. All in, so to say. Oh, yeah, BTW, that’s another stupid thing to do – going all in is usually not a good idea…
So I sold Nokia (BTW, to make it even ‘better’, bloody online Broker/Stock Exchange had split my order and sold a smaller portion at a somewhat higher price and the rest went dirt cheap. Like, really, really cheap. So cheap that I’m now expecting a loss of ca. 2000-3000 EUR). With these funds I bought another 170 shares of Varta. Yes, baby. Let’s go! Bam. 200 shares packed in a rocket. Now there’s no stopping before we reach the moon… 🚀
My rationale was: Varta will cover for Nokia loss, so everything is gonna be just fine. And then… Varta stock took a plunge. Like a stone. Blump.
So now not only I have incurred losses with Nokia (oh, you know what’s even better? Nokia reached and exceeded my previously set TP at 3,185 EUR just half an hour after I sold all the shares at a huge loss (as the mater of fact, it even went up to 3,2 EUR). Meaning – I could have exited Nokia position today morning with ca. 200/300 EUR win. Haha. FU Murphy. Yep. FU big time dude. And F your stupid law, too).
1. No FOMO
2. Don’t be greedy
3. Making a big buck in a single transaction depends a lot on luck (which may or may not come)
4. The big money is not in the buying or selling. But in the waiting (Charlie Munger)
5. Never go all in
Overall, my portfolio is still positive (I hope; we’ll see tomorrow; haha 😊). But today I decimated my gains which I’ve been slowly making since June and that’s a pity. But, you know what – I’m neither too sad nor mad about today’s experience. Of course I’m not happy about it, either. It’s just another lesson. Big money comes slowly. This is one thing I definitely need to remember.
And no more FOMO for me! (fingers crossed 😊)