What a f*cking day
Well today was fun.
I went to sleep last night, 50 points up, and woke up at 5 AM, 18 points down.
Brexit had passed.
Granted, 18 points isn’t super substantial, but the US markets hadn’t yet opened and I anticipated a steeper drop.
I immediately began selling off my entire portfolio, losing another 30-something points before it was all gone (sorry, forgot to screenshot this).
People keep telling me that this type of fire-sale was unnecessary because the market always rebounds, but I completely disagree. Knowing nothing about which industries/companies were strong enough to withstand the panic, or how long the plunge would last (or how deep it would go), selling was the safest bet. I only risked a minor opportunity cost — big deal.
After selling, I watched over the course of several hours as the Dow dropped 400 and then 500 points. I started scrolling through my old companies to see which were taking the worst beating.
The extremely tight angle (← screenshot to the left) of the rise seemed to indicate false bottoms, giving me confidence that I should buy. Granted, this thought was largely a bullshit justification because I just really wanted to buy (emotionally driven).
My emotion-rattled brain figured that, if I put enough money in and it continued to rise, I could replenish all of my losses in under a day.
Smart, I know (kidding). It was a severely flawed strategy that…actually worked.
I put in $2075 dollars — the bulk value of my portfolio. That money bought me 26 shares. If the stock dropped along with the Dow, I could have lost most of my portfolio’s value. But that’s not what happened.
It continued to go up.
You can see in the second screenshot (← to the left) that over the course of the day, I recovered all but 9 points while the Dow spiraled out of control.
I considered this a huge success on an incredibly risky gamble.
But I made one mistake: counting my chickens before they hatched. Tasting greed, and seeing an ongoing upward trend, I ignored signs that AWK would probably correct before the end of the day. I held.
The third screenshot (below) shows how much that cost me: I went from a high of $2217 dollars, to a depressing low of $2188, erasing most of my gains for the day.
I managed to recover another 2 points before the market closed, ending at $2190. That left me with with a comfortable gain from the steep decline in the morning.
The lesson here: don’t be a greedy idiot. Missing an opportunity is not as painful as incurring an avoidable cost. Always sell while confident. Listen to the data, not your emotions. And gamble recklessly (kidding).
All in all, I’m happy to have avoided any serious loss. The Dow plunged over 600 points by market close, erasing all of its year-to-date gains.
Luckily, with my financials in tact, I’m going to try and get in on some deflated shares while I still can (I’m already upset that I missed the Bitcoin opportunity).
That’s all for now. Enjoy the weekend!