Warren Buffett says 99% of people should not pick stocks. If I listened to him I would have a lot less money but at the same time I’m not comfortable with picking 100% of my portfolio’s stocks.
When I look back at the times it made sense for me to pick a stock to buy, those times were few and far between. If you are going to pick a stock I would advocate patience because 99% of us may not be good at picking stocks all the time.
In 2003 a textbook for college costed $120 at the school bookstore. Being cheap and poor I didn’t want to pay that so I searched the internet with the small hope that I might find a deal. This Amazon company had the same book brand new advertised for half the price. I ordered it and it was delivered on time as promised. I thought, wow, this is such a great service. That may have been the sign to buy the stock. Do I have to tell you where the stock is today?
I didn’t come across another company that I thought would be a great buy until 7 years later. Dollarama, a Canadian dollar store, had gone public recently. I remember hearing on the radio about it while getting ready for work. I’ve always thought Dollarama was a great business. Every time I went in there I ended up buying way more than I intended to, and did I mention that I’m cheap. Today the stock has gone 15 times since the IPO. I ended up buying the stock in 2015 and still made a good return.
Luckily, in 2015 I bought in early on Canadian marijuana companies. I had some knowledge about the business and consumers from growing up with a few potheads and drug dealers.
Another Warren Buffett line is buy what you know. Sometimes it’s just that simple. Not always but sometimes.
Do you have any interesting stock picking stories?