Sunday, January 5, 2020

Taking (and Talking) Stock in 2020

I'm a very reflective person, especially dwelling on decisions I've made in the past and trying to justify them, 1.) blaming myself if things didn't go right and 2.) wishing I could go back in time and do over my life. It's funny when I look back at the last 10 years, since everybody did a decade-reflection recently since the calendar flipped to 2020, and the main things I cared about in 2010, like fantasy sports and NFL picks ( I used to have a running segment with a law school classmate Brother Mouzone, whom I don't talk to anymore) are way off in the back burner while tiny, small mentions are now big things like comments on the stock market (I apparently wrote multiple blog entries called "BUY CHIPOTLE STOCK!" which actually would have worked out. For example, on February 11, 2011, I wrote the following paragraph on my blog, which means I genuinely thought it:

"Wanna know what I think about the stock market, after we had a 10-day winning streak (in the green) the past 2 weeks? I think this year's gonna be a good year......there may be a bit of a correction coming after this huge upswing, so wait for the market to go down a couple ticks (possibly Monday-Tuesday of this week), and then go in and buy premium stocks, (AAPL, AMZN, GOOG come to mind) or even just buy the Dow itself. This stock market's in recovery and it's making up for lost time (from Aug. 2008- 2009). The only worry is a bubble, but that's a bit premature: as long as we're still in "recovery" mode it'll gain steadily, and then in 2012 or 2013 we may want to be careful of the next "bubble burst."

(Bangs head against wall multiple times). WHY DID I NOT JUST DO THIS??? I did not have much money back then and actually owed Fannie Mae quite a lot of dough, but still I had an Etrade account already. AAPL was at $50 (now $300!),  Goog eventually would become Alphabet (still with stock symbol GOOG) but was about $200 at the time (now $1,300!) and the worst one, AMZN was a $170 stock in February 2011 (not exactly the $3 it started trading at in 1997, but still) and is now $1850. Oh and the Dow was at about 12000, whereas it's 28000+ now, in probably the best decades ever of the stock market, 10 years running of a strong bull market. And I wasn't invested very heavily in it until the beginning of 2018 (for some reason, I lost interest in this weird fad called MAKING MONEY). Sure there were some losers for the decade like RIMM (I once criticized my parents for buying RIMM, and it indeed went to zero, as did the whole Blackberry product) and PTR, PetroChina, which my parents invested in and has halved its overall value, but the no-brainer stocks of companies you and I and the world has heard of has gone up and gone up substantially, sometimes exponentially, sometimes parabolically in the case of Netflix, which went from like $10 stock to $300+ nowadays.

That's probably the Number 1 thing I learned from my finance classes at the University of Illinois: the time value of money, or "the power of compound interest," as Jim Cramer puts it on his show. Stay invested, and your money will eventually grow. Instead of always trying to find the next get-rich-quick scheme, the stock market is the best get-rich slowly scheme. Sure, I wouldn't have bought Netflix in 2010 because I thought it was just this movie business that sent a movie to you every week that you had to send back to get the new one (my dad used to do this, and boy has that business model changed). But it's not like I didn't know about McDonald's ten years ago ( $60 back then, now $200) or Boeing ($70 back then, now $330), Home Depot, (28 back then, now $220). Hindsight's always 20/20, and past performance does not guarantee future results, but man it would have been nice to get those last 10 years back. Where does the market go from here? Well it seems like the overall market is booming and will ride momentum from the 2019 gains (after we got a pretty big correction at the end of 2018) and with the Federal Reserve as a tailwind and Trump being a stock market president, a trade war with China progressing, it seems like the market is in good shape despite having run a lot recently. Should continue to do pretty well in 2020 until the Presidential election; the minor bumps in the world like U.S.'s air strike against Iran will cause pullbacks but nothing too alarming long-term. Just putting in a marker here so I look like a genius/idiot in 10 years. I always believed experts when they said the next recession is close, but it's hard to time the market, and we've been saying that for a few years now......it might not come for awhile. Back in 2011 I was writing about a 9.5% unemployment rate.........now there's a 4% unemployment rate, and we're almost always at historic lows......meaning Americans will continue to spend money (even if they shouldn't be spending money). Still a lot of money can be made in regular index funds and just buying some household names (stock market's easy, I tell you) like old tech like MSFT, Aapl, etc., but for possibility of huge returns (we're talking NFLX, AMZN, 1000% gains in 10 years) I'd say people have to be more adventurous with next-level things we don't even know about yet, Nividia's AI technology might be it, or a China company (Alibaba's best in breed) or I hate to say it because it's so divisive, but TSLA could be a visionary company leading the way in the new world. But then again, these companies also don't have the safety of reliable earnings like the old tech does and could just go down a lot, so therein lies the rub... and the risk. Gotta risk a lot to make a lot. I've taken my lumps with IPO's......Uber, Lyft, Chinese IPO's Nio, IQ, etc.... I don't touch those things anymore. In fact I don't know why some investors wade into sectors that have proven to be duds......energy, "transports," marijuana, even bitcoin and cryptocurrency.....how bout just going with the leading sector called technology (so much included in there like semiconductors, cloud stocks, streaming services) ...and maybe sprinkle in some financial stocks, consumer staples like TGT, HD, WMT, COST, and just make sure you're always getting the best companies instead of trying to catch a lucky diamond in the rough with a hot IPO or a buyout candidate (if those miss, they miss hard to the downside).  I'm excited for what the next 10 years will bring, but I just can't shake the feeling and regret that I missed one of the best buying opportunities of a lifetime in the big 2010's stretch......I'm just here to get a little action on the tail end before we go into tougher times.


The thing about looking back at 2010 and seeing how differently things have changed, is then you have to thing back 20 years to when Tom Brady and Bill Belichek built their legacy of dominance in the NFL, and it's an amazing feat. They've been around as long as Survivor TV series, throughout my whole growing up process from teen to married man, through the 2 Bush and Obama regimes and deep into Trump's first term, the world has changed so much since 2001 (they were pre-9/11 terror attacks) and I have changed so much, but finally, finally, the Patriots grasp on the NFL as the Evil Empire may have ended tonight when they lost to the Tennessee Titans in the first round of the playoffs. It's probably similar to watching a band break up or a long-time neighbor move away to a different state: I'm not sure what I'll do without the New England Patriots anymore.

Fantasize on,

Robert Yan





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