Is it just me, or does investing kinda feel like parenting?
What’s that? Huh? I don’t wanna hear it. I don’t care what your younger, cooler, smarter, sharper more cost-efficient brother Amazon did. Go to your room and think about what you did last quarter. I’ll let you know when you can come out.
Sound familiar? Either way, if you’re a parent or investor (or both), I figure that exchange probably resonates on at least some level.
Target’s most recent quarter sucked. Like … really, really sucked. You probably already know that. I tried to give the company the benefit of the doubt, giving it a few more chances in the last week or so, but it keeps sliding.
I bought 2 shares March 1 for $57.72 each, then, after an even farther fall, added a couple more five days later for $56.69 apiece.
I basically said, “Target, I know you’ve made some poor choices, but I believe in you. Everybody makes mistakes. Let’s learn form this and do better next time.”
So, what’s it do? Yeah, slips even more to $55.25 by Tuesday’s close.
So, what do I do? Yeah … nothing. I’m probably gonna take a breather from buying, but it’s an interesting situation because, well, the harder Target gets to buy, the better value it becomes. I still have a ton to learn about investing (I have less than a year of experience under my belt), so I have no clue where the bottom is. I kinda hope we’ve hit it, but I literally have no idea.
Don’t get me wrong: I’m not giving up on the company. I mean, the dividend yield has crept up to 4.35% in recent weeks. As a value investor, how can you give up on that? The share price is nearing a multi-year low and I absolutely love the dividend ($2.40 a share – a number that’s increased for 49 consecutive years). Even though management has said the company won’t be profitable again until 2019, I think the divi is pretty safe. The investment the company’s making to streamline the stores seems like a good one, too.
I’m not giving up on Target … just taking a bit of a break from it.
With all that said, this post really isn’t about Target or Amazon or any other stock. It’s about all the stocks … and investing in general.
The longer I’ve been in the game, the more it feels like parenting. That thought seems weird when it first hits the brain, I know, but hear me out. The stock market is like a group of kids (and I have two of my own, so I know) – unpredictable, sometimes irrational, but always entertaining.
I love my investments … not as much as I love my kids, but I do feel attached to them. That said, like my kids – two boys (and a third on the way) – I have no clue what the hell they’re gonna do next.
Sometimes I feel like a parent when I peek in at my investments. I always expect them to be on their best behavior, but, well, I guess that just isn’t really all that realistic. Sometimes they’re all playing together quite nicely, like a few days ago when my portfolio jumped by $96.71 and almost everything was green. Sometimes, though, like the last few weeks, Chase is quietly coloring at the table while Target is eating crayons in the corner. My JPM position has appreciated by 39.50% since opening while TGT is down 10.41%.
The longer it gets, the more I realize this post is kinda silly. It doesn’t really have any value for you guys – just kinda a fun, throw-away piece about what’s on my mind at the moment – so I’ll wrap it up with this: I see a lot of similarities between investing and parenting. That said, I think treating stocks like kids isn’t a terrible approach. Having kids is a huge decision, way more significant than buying a stock. But, if you approach the decision to make a purchase with the long-term lens parents use, I think you’ll be in good shape. At the very least, it’ll prevent you from making stupid, impulsive purchases you don’t believe in.
Also, like kids, if you truly believe in a company I guess it makes sense to stay with them through the good and the bad. Treat them right now and they’ll take care of you later, right?
On that note, Target’s been in his room for awhile now. Maybe I should let him out. Think he’s learned his lesson?