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.
The first few companies I bought that day were Air Canada (TSX: AC), Canadian Western Bank (TSX: CWB), WestJet (TSX: WJA), and Cenovus Energy (TSX: CVE).
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.
Think LONG-Term
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.
J.M.
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