January 1: $586,043 (starting point)
February 1: $587,134
March 1: $576,890
The dirty totals
February loss: $10,244
Overall loss: $9,153
Days elapsed: 59
Days to go: 1441
The markets continued to climb in February. The S&P 500 went from 1498 to 1518. All indexes are currently near their all time highs. Things are going awesome; except for me.
Apple (460 -> 430 in February) yanked my portfolio down $10,500 just in February. Since January, Apple has dragged me down $43,000*: (553-430) x 350 shares! Uggggh. Let me rephrase that; UGGGGGHHH!!! Please learn from my mistakes; if you must mess around with individual stocks (and you probably shouldn’t), they should be a small percentage of your portfolio.
In the near term, I’m not optimistic:
- Apple will probably continue to fall. Sentiment on the company is very low and it wouldn’t surprise me if this one dips into the 300s (currently $430 and falling like a rock). Apple needs a big catalyst to turn it around and I don’t expect one anytime soon. The exception would be a very good earnings announcement in April. For more on Apple, see the end** of this post.
- The markets are flying right now, but we’re probably due for a correction. All of my other investments are doing very well, but a broad market correction will drag everything down.
Long term though, I’m optimistic. Apple just had its most profitable quarter in history, but analysts are writing the company off for dead based on lower than anticipated iPhone sales. It seems like a short-term overreaction, but time will tell. Check back with me in 2014.
Even if Apple doesn’t recover from it’s death spiral, it isn’t the end of the world. 1500 days may turn into 1800 days, but working an extra year when you’re in your early 40s is a lot easier to do than when you’re in your 60s or 70s.
One of the main things I’ve learned about investing is not to worry about the short term fluctuations. When you buy any investment, your mindset should be to sit on it for years. If you must by individual stocks, buy companies with strong moats and let it ride.
Here’s hoping for a better March. I have a 401(k) match coming up and also an income tax return. Will that be enough to turn the portfolio positive? Stay tuned.
*While I’ve lost an incredible amount of money in a very brief time, I bought most of my shares in January of 2007 when the iPhone was announced. At that time, Apple was selling for under $100, so life could be worse.
**Here is what I think Apple must do to get it’s Mojo back:
- Release an iPad Mini with a retina display: The iPad Mini has been a huge success. Releasing the next model with better specs will juice sales.
- Open an App Store for Apple TV: The iPhone and iPad are tremendously popular with gamers. Imagine what an App Store could do for Apple TV. Sony and Microsoft would be shivering their boots.
- Release an iPhone for China Mobile (CM): CM is the biggest cell phone carrier in the world with 700,000,000 subscribers, yet they don’t offer the iPhone. Apple needs to come out with an affordable phone for CM. Analysts complain about smaller margins, but right now margins are 0 for CM.
- Come out with a TV: Make it 4K with 52″ and 60″ screen sizes. Make the iPad a killer remote. Make the iCloud a DVR, allowing you to watch stuff you record on any iDevice.
- Come out with a bigger phone: People like big screens. The screen could be made bigger in a way that current apps would run without modification.
- Finally, get into home automation/smart home technology: This involves being able to do things like control your thermostat or security system more intelligently. I’d love to be able to open my garage and front door with my phone. I’d love to be able to turn up the thermostat when I’m on my way home. Better yet, I’d like the phone to know when I’m a certain distance away and do it automatically. I’d like to see my energy use right there on my iPad so I can learn and be more efficient. Apple, get at it!
OK, that’s my 2 cents. Check back in a year to see if Apple has further destroyed my portfolio or if Tim Cook has read my blog and implemented all of my great ideas!
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