The fist stock I ever wanted to buy was Google. It wasn’t because I was interested in the stock market. far from it. It was because I loved computer programming, I knew enough about computers to know that Google was going to be big. I didn’t expect it to be this big, but at the time, I felt that I could maybe double or triple my investment. I was in grade 11 at the time, with $500 to my name, savings from a summer job. I asked my mother to help purchase some shares. She initially agreed to help, however, later on refused. maybe it was because she thought that it would be a waste of money, maybe she didn’t understand the process, maybe it was the fact that she had a thousand things to worry about and didn’t have the time to open an investment account. At the time I was too young to buy the shares myself and needed a co-signer.
Google went public August 19th, 2004. Opened at 85$/share. Let’s assume I had bought google at it’s closing price of about $100/share. That would have given me 5 shares of Google in 2004. As of the time of writing this article Google class A is trading at $939.70 and Google Class C is trading at $923.42. Meaning that initial $500 investment would be worth about $9315.60. A solid 1863.12% return. Thanks mom.
Fast forward 10 years later…
It was March 2014. Great day filled with joy. I was finally accepted to medical school. All the hard work had finally paid off. Things were much simpler back then. many things. Obama was president of United States for one. Transgender individuals were celebrated (i.e. Laverne Cox on cover of “Time”), instead of what we are currently seeing with the current administration.FIFA World Cup was taking place, and spoiler alert: Germany would eventually beat Argentina 1-0 in extra time to win football’s 20th World Cup in Rio de Janeiro. Here is what the SPY looked like at the time.
It was the World Cup of soccer that summer. I knew two things.
- Coca Cola was sponsoring the event.
- People would probably be drinking lots of beer that summer because of this event.
So, finally being old enough to open an investment account. I went to my bank, opened my first TFSA, and I bought shares in Coca Cola (KO) and Molson Coors Brewing Co. (TAP).
There is no doubt that there were some periods of panic during the time I owned these companies. But I was sure about the fact that people love beer, and Coca Cola was too big to fail. So I held.
It was during this time that I started to actually do research on the two companies. Stupid I know. But no one in my family had any financial training. I sure didn’t either. I didn’t even know how to read the charts when I bought these two stocks. I basically didn’t have a clue about anything. It was like buying a car without a licence. But that’s another story for another blog.
I was lucky with these two picks. I ended up with some profits in both. But, it was all luck. The questions I asked after I purchased these stocks should have been asked BEFORE I bought shares in these companies.
My confidence was high at the of these two trades. I had done well with little work and research. The confidence was high, which led to more risky picks, which is the story of another post.
Ask questions. Do your due diligence. Don’t just buy something because you think it might go up, with no facts to back up your thesis. Buying shares in a company you know nothing about, is the same as if you were working in an emergency department as a physician and you walked into patient rooms without looking at their chart or knowing anything about them, and treating them for heart failure. You might be lucky two times in a row. but eventually you will be wrong, and you will lose your licence. The same applies to the stock market, if you commit to a company without knowing what your buying, you will eventually lose your money and that will be the topic of the next blog post.