Have faith in your intuition and listen to your gut feeling. – Ann Cotton
Anyone familiar with the stock market and with the e-commerce company Shopify will know that Shopify has been one heck of a performer for the past year. What if I told you that I once owned many shares and would have made nearly $100,000 in profit if I held it for a year?
Well, I would have, but I didn’t for two reasons. These two reasons have changed the way I invest and how I live my life.
Stick To Your Gut
It was August 19 in 2015 that I first started investing at 19 years old. After years of reading and studying the works of individuals like Warren Buffett, Bill Ackman and others of the sort, I decided it was about time that I got into the game. I had saved a handsome amount of money from the jobs I had before and I was prepared to buy some company shares.
THEN THERE WAS ONE COMPANY THAT I STUMBLED ACROSS ON AN ARTICLE: Shopify (TSX: SHOP).
I read about the company and everything they provided to their customers and I knew this was going to be something. So I bought as many shares as I could. And it was a lot. $46.50 per share. Hundreds of them.
During this time, the whole of the Canadian market began to decline. I held on, trying to keep to my mantra of “What Would Buffett Do”.
Then January 2016 came and I crumbled.
I saw my portfolio declining and I got into a panic. To make matters worse, my job wasn’t giving me enough shifts so I had to start using my credit card to pay for things that would take some time to pay off – I didn’t want to ask my parents to pay it for me.
So what did I do?
I sold all of my Shopify shares. ALL of it.
As a self-taught investor at 19, mistakes tend to be made. Now I know that when the market turns to crap, that is when one should buy, not sell.
Anyways, I sold AT A LOSS – just to be able to stop the bleeding and pay my credit. If I had stayed in and stuck to my guns and gut feeling about a great company, I would have cashed out today with over $100,000 IN PROFIT.
As a freshman-investor, I still knew the direction Shopify was going. I just had (and continue to have) a good natural way of knowing a solid, profitable, long-term company from those who are here today, gone tomorrow.
Instead of sticking to my long-term plan, I bailed in order to recoup losses and sleep better at night. What did I also bail on? 6-figure profit.
In the age of entrepreneurs, it would be crazy for someone to think that a platform to encourage that would not be profitable. I knew this but I thought short-term and lost big time in potential gains. Granted, some people may read this article 10 years from now and Shopify may be obsolete. But it makes you think: What am I risking short-term satisfaction for that may drive me away from the long-term performance of life, happiness, wealth, peace of mind, a business? Whatever it may be.
I encourage you to do your research in whatever you are doing, make a sound decision, and stick to it until the end. If you believe in something, you should be willing to stick through the good, the bad, and the ugly – as long as you know what the final outcome will be.
As for you investors like me, do as Warren Buffett says: “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes”.
Until next time,
Live Long and Prosperous.
Value Investing Millennial Jahnome McEwan provides FIFTY Tips for Young Adults looking to build wealth from now. If working a 9-5 until retirement twists your stomach, Jahnome has a way to get you out of it!
Click here if you are interested in learning how!