Stocks: Talk me out of this kinda stupid move.

[gotsmack]

Disclosure: I have an advanced business degree and know better, but for some reason I can't help myself.

Situation: In my investment account I have 10% I use to play around with options. 50% in Nintendo and 40% in the New York Mercantile Exchange. I'm up like 15%+ so far this year and we're only in July. These are recent buys, I previously cashed out of Nvidia and I made a few bucks playing Crocks and betting against the sub prime market right before the peak fall out.

I'm basically up a lot on the NY Merc for holding a week. I got in at 128 and I want to dump it. This is normal except the only reason I want to do it is because I want to put in all in Nintendo which would make me 90% Nintendo.

Again I understand that I should be much more diversified, but when you think you have a winner it screws up your reasoning. So help me and talk me out of it. I know better, but the desire is just too strong.


I'm not worried about retirement since I'm young and I have a 401k through work in a S&P 500 index.

 

[Safeway]

Diversify. 100% Nintendo != Diversity.

Order of Events:
1) Sell everything.
2) Buy Nintendo.
3) Smirk.
4) ...
5) Stock goes nowhere, opportunity cost .
6) ...
7) Frown, sell Nintendo at a loss or minimal gain.
8) Re-buy old stock at new higher price and realize you fucked up.

 

[mugs]

This is a bad idea.

 

[ponyo]

I used to do the same thing when I was younger. Yes it's foolish. But it's your money.

I forgot I was on margin too when I did this.

 

[her209]

Originally posted by: Safeway
Diversify. 100% Nintendo != Diversity.

Order of Events:
1) Sell everything.
2) Buy Nintendo.
3) Smirk.
4) ...
5) Stock goes nowhere, opportunity cost .
6) ...
7) Frown, sell Nintendo at a loss or minimal gain.
8) Re-buy old stock at new higher price and realize you fucked up.

In the OP's mind:
Order of Events:
1) Does nothing.
2) ...
3) Stock goes crazy.
6) ...
7) Kicks himself in the nuts.

 

[gotsmack]

Originally posted by: her209

Originally posted by: Safeway
Diversify. 100% Nintendo != Diversity.

Order of Events:
1) Sell everything.
2) Buy Nintendo.
3) Smirk.
4) ...
5) Stock goes nowhere, opportunity cost .
6) ...
7) Frown, sell Nintendo at a loss or minimal gain.
8) Re-buy old stock at new higher price and realize you fucked up.

In the OP's mind:
Order of Events:
1) Does nothing.
2) ...
3) Stock goes crazy.
6) ...
7) Kicks himself in the nuts.

HAHA, pretty much.

I'm expecting the NMX to go up another 8-25 points in the next 6 months. Nintendo could potentially triple in the next two years.

I want to take profits on a sure thing and bet it on an unknown.

I need you guys to talk me out of it because Nintendo's been on a rampage and it only has to go up 1 point for every 2.5 that the NMX makes.

 

[bctbct]

Just cash out and put half on red and half on black.

 

[hiromizu]

Many people gain and many people lose. Most lose..

 

[YoungGun21]

Everything on Sony! NOW!

 

[her209]

Originally posted by: hiromizu
Many people gain and many people lose. Most lose..

If you lose then someone's has to gain.

 

[Hacp]

33% Nintendo, 33% Microsoft, 33% Money Market, 1% Sony

 

[bsobel]

Again I understand that I should be much more diversified, but when you think you have a winner it screws up your reasoning.

Anybody can pick one winner, you should be working on finding another one (and then another one, as so on). Try thinking of it this way, if you put it all on Nintendo your basically admitting you've had one good idea this year and sans that you have no idea how to invest.

 

[hiromizu]

Originally posted by: her209

Originally posted by: hiromizu
Many people gain and many people lose. Most lose..

If you lose then someone's has to gain.

Absolutely. As long as there's some market movement whether it's down or up, there is money to be made.

 

[senseamp]

You missed the boat already.

 

[DaveSimmons]

This might have been a good idea 9 months ago, it's really stupid now.

> "I'm not worried about retirement since I'm young and I have a 401k through work in a S&P 500 index. "

If you invest this money wisely too you can either retire early or live better when you retire at 60.

So it's still a stupid idea unless you get as much enjoyment out of throwing the money away as you would from spending it on eating out at nice restaurants, buying better AV gear, hookers 'n' blow, or whatever.

Some people enjoy gambling with part of their money, but as long as they realize they're treating it as a hobby expense instead of a real investment that's OK.

 

[newmachineoverlord]

Nintendo is already popular. They might have been undervalued in the late N64 and gamecube era, but now I think the secret that they are the best game company ever is out, and their stock probably isn't undervalued now.

That said, when oil demand begins to exceed supply, how much discretionary income do you think will be spent on games? The sky is the limit on oil and gas prices once that happens, and it will take at least three years after that to build the infrastructure to replace the decreasing supply of oil with renewable energy sources, unless PHEVs are already widespread when it occurs. In all likelyhood, plug in hybrids are not going to be common when the supply crunch hits, and three years to replace oil is unrealistically optimistic.

You should find some investments that will profit from oil scarcity. Gaming companies and electronics suppliers probably will not. Insulation or renewable energy suppliers would be a good place to start. Bicycle manufacturers perhaps. The point is that when the price shocks happen and oil hits $200/barrel, you can make a killing from it or be financially killed by it.

It is most likely that the big oil crash will happen in 2012, and it will definitely happen before 2020. It is not likely to happen before 2010, but might. Once it does, ride the wave to wealth for a few years. Eventually the economy will adapt to use other fuels, so be ready to switch over to a different portfolio about five to ten years after the big energy crunch. Unless of course the economy collapses so completely that money becomes worthless, in which case I should have advised you divest from the stock market to buy canned food, bottled water, a gun, a case of ammo, batteries, flash lights, solar panels, barbed wire, and several manual can openers.
http://biz.yahoo.com/zacks/070713/8635.html?.v=1

 

[gotsmack]

Originally posted by: Hacp
33% Nintendo, 33% Microsoft, 33% Money Market, 1% Sony

Sony?

They're too close to their 52 week high. Didn't they just have a string of bad news? I'm going to wait a bit for this one and I don't think there is much growth left in Microsoft.

 

[gotsmack]

Originally posted by: newmachineoverlord
Nintendo is already popular. They might have been undervalued in the late N64 and gamecube era, but now I think the secret that they are the best game company ever is out, and their stock probably isn't undervalued now.

That said, when oil demand begins to exceed supply, how much discretionary income do you think will be spent on games? The sky is the limit on oil and gas prices once that happens, and it will take at least three years after that to build the infrastructure to replace the decreasing supply of oil with renewable energy sources, unless PHEVs are already widespread when it occurs. In all likelyhood, plug in hybrids are not going to be common when the supply crunch hits, and three years to replace oil is unrealistically optimistic.

You should find some investments that will profit from oil scarcity. Gaming companies and electronics suppliers probably will not. Insulation or renewable energy suppliers would be a good place to start. Bicycle manufacturers perhaps. The point is that when the price shocks happen and oil hits $200/barrel, you can make a killing from it or be financially killed by it.

It is most likely that the big oil crash will happen in 2012, and it will definitely happen before 2020. It is not likely to happen before 2010, but might. Once it does, ride the wave to wealth for a few years. Eventually the economy will adapt to use other fuels, so be ready to switch over to a different portfolio about five to ten years after the big energy crunch. Unless of course the economy collapses so completely that money becomes worthless, in which case I should have advised you divest from the stock market to buy canned food, bottled water, a gun, a case of ammo, batteries, flash lights, solar panels, barbed wire, and several manual can openers.
http://biz.yahoo.com/zacks/070713/8635.html?.v=1

Oil is a 2010 play. I'll worry about it in 2010. I just cashed out of USO and I have my Roth IRA in DUK and SE. So I think I'm covered in my energy play.

The real bargains this summer are going to be the I Banks.

 

[tw1164]

Buy high! Do it, you have my blessing.

 

[MmmSkyscraper]

:thumbsdown:

 

[dmw16]

for someone with an advanced business degree you aren't very smart

seriously tho, seems like such a lack of diversity would be a bad move.

 

[imported_Lothar]

Sorry, but you've largely missed the boat.
I bought them at $33.75 on March 7th.

Dumping your entire money in only one stock is a dumb idea.

 

[thomsbrain]

Buffet would give you the opposite advice: Buy Sony, not Nintendo. They have a solid business model, a solid product, and are merely waiting for a few killer game titles, which are on the way. Nintendo has already made its gain, and the best you could hope for is that it won't fall. There aren't any huge gains to be made there in the next few years. Investing based purely on retrospective success is not a wise plan.

 

[jadinolf]

Originally posted by: mugs
This is a bad idea.

You think?

 

[ponyo]

Originally posted by: thomsbrain
Buffet would give you the opposite advice: Buy Sony, not Nintendo. They have a solid business model, a solid product, and are merely waiting for a few killer game titles, which are on the way. Nintendo has already made its gain, and the best you could hope for is that it won't fall. There aren't any huge gains to be made there in the next few years. Investing based purely on retrospective success is not a wise plan.

Buffet wouldn't give you that advice. Buffet doesn't invest in companies he doesn't understand and he doesn't invest in technology companies. Buffet used to have very concentrated portfolio and bet big in companies he believed in and thought was undervalued. Many times he bought the entire company.

I too like concentrated portfolio of only few stocks but putting it all in one company is just too risky. I learned my lesson the hard way although it took couple big scary losses to finally sink in. It's pure gambling and although when you get lucky you can score big, the losses hurt far worse. All it takes is one bad bet to wipe you out or severely cripple you. Like any form of gambling, you have to have smart money management if you want to stay in the game and prosper. Stock trading is just one form of gambling.