I started investing in the stock market around 2000, on the eve of the dot-com bust. Some of my first securities purchased were Teledyne Technologies (TDY) at $17.56 a share, Cummings (CUM) at $32.00 and Foundry Networks (FDRY) which was sold in 2008 at $51.68.
In the sunrise of my stock market investing journey, I had “zeal but not according to knowledge.”I quickly sold the first two for a few pennies in profit and loss massively on Foundry networks. I had opened a brokerage account at Ameritrade with the minimum required of $500. Over the next 10 years or so I tested a manifold of stock market strategies including day trading, buying a stock a few days before the company declares dividends, buying stock on a bad market day, penny stock, etc.None of these strategies worked for me nor did they peaked my interest. One bright day I came across an article on Warren Buffet, most likely in the Barrons (a weekly investment paper own by the Dow Jones Company) and mentioned in the article was Benjamin Graham, Warren Buffet’s mentor who wrote the famous book The Intelligent Investor (the bible of value investing) as well as Security Analysis.I purchased the Intelligent Investor a few months before the market crash of 2008 / 2009. This magnificent treatise on the stock market opened my eyes to a paradigm of investing with a margin of safety, a lower possible downside in stock movement and a massive probability of upside in price.
The lessons learned from this book gave me the confidence to dive into the market in 2009 when most people, the great herd, were living in droves. Scripture tells us to be aware of following the crowd. Warren Buffet said, “be fearful while others are greedy and greedy while others are fearful.”
To be truly uncharacteristically unique, you must zig while others zag; for if we do what everyone else is doing, we will generate average returns.
I purchased stocks of the Dow Chemical company (DOW) using prudence garnered from this invaluable book: buy a great company whose price has experienced a precipitous decline because of some temporary problem. In late 2008 Dow Chemical Company entered into a joint venture agreement with the government of Saudi Arabia to purchase Rohm and Haas for $20b. Saudi Arabia backed out of the deal and Dow Chemical stock fell to $14 a share, and subsequently falling further in the heart of the financial crises to $7.16 a share.
I purchased the stock at $15 and sold it above $30, generating over 100% in profit. As of this writing the stock is at an appreciable price of $52.65
On my sojourn to a place of proper stock market understanding I have made happy returns and experienced grievously losses, like the immense lost I suffered from investment in a Chinese reverse merger company, Agfeed, which acquired an American pig producer, M2P2. The company lied about its asset values, went bankrupt, costing investors a boatload of cash.
Through years of reading and studying (I try to read a book a week) what the Bible says about investing I am at a comfortable place where I can purchase market securities void of the promptings of anxiety, sleeping peacefully throughout the night.