A Tale of Two Stock Picks

Interesting story:

First of all, let’s establish that to date, my wife and I are not “stock pickers.” We have focused on index funds.

However, a few years ago, my wife started a Robinhood account (Robinhood is a popular investing app). This was around the beginning of 2018. Incidentally, this was right when we learned about Moviepass, the movie-going subscription program which upset the industry by offering dramatically cheap monthly passes that practically gave people free movie tickets.

Moviepass’s moment proved to be short-lived. However, at the time we were swept away in the excitement and subscribed. Being movie hounds, we were ecstatic that over the next few months we were able to see several dozen movies at theaters for a fraction of the normal cost.

Back to Robinhood. One day on Robinhood, we saw that Moviepass stock (represented by its parent company Helios & Matheson) was available at only $5. Why not buy some? we said to ourselves. We hadn’t bought stocks before, and figured this would be a harmless learning experience. To ensure this, we decided to invest no more than about $50 a month to it. If things didn’t work out, no biggie.

On the other hand, we were quite excited with the thought that this bold upstart might revolutionize the movie-going industry. Could it become the next Netflix? Maybe we were brilliant to spot this possible future star before other investors did!

Well, very soon that the party ended: the company couldn’t continue footing the bill indefinitely for millions of people’s movie tickets, hoping it would win big for them. We enjoyed going to nearly-free movies for several months. Fast forward six months or so and our stocks were basically worthless. We had even acquired 600 shares along the way (for pennies), but even that basically went to $0.

Happily, since we had gone in with our eyes open and invested only about $300 into the stock, the experience proved a relatively painless and informative experiment.*

Fast forward a year. My wife decides to buy two shares of Zoom right when it goes public. Yes, just two shares. Happily, she scored them at $62. If you follow business news–no, scratch that, if you are alive on planet earth in 2020–you know that Zoom became a house-hold name this year. Its stock price ballooned as well, recently getting as high as $589 (!). It has since cooled off significantly: today it ended at $397.

Despite a nearly 33% drop in recent weeks, that’s still about a sixfold increase over what my wife paid for her two shares!

In summary, our brief and relatively insignificant stock-buying careers have already showed us the two extremes that can come with owning individual stocks. We experienced the delight of buying a total winner, and the sobering disappointment of buying, well, the exact opposite.

Happily, we remain unscathed.

The Tale of Two Stocks Picks!

*I certainly don’t take losing $300 lightly. However, our mindset was to act as if we were buying a course or otherwise getting education on the subject. We have definitely paid more than that to go to a workshop 🙂

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