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Archive for February, 2013

Sticking to your guns & luck

February 25th, 2013 at 12:02 am

In certain situations sticking to what you believe can be a good thing, sometimes it can be a mistake, and sometimes it can be a mistake *and* a good thing (that's what we call "LUCKY" Smile ).

=== WARNING: Stock buying discussion coming up - may bore some to death Wink ====

I tend to try and not to play a lot of buying & selling in my Roth IRA (and will follow this philosophy in my brokerage). I try to buy stocks I feel confident will hold value for the long run for me. Not only that, I try to pick a price that I think I can get a stock where I will be happy, and do my darn-est to get it at that price. I use limit orders in the IRA once I target a stock and let the order sit and wait for the stock price to come to me. Once previously that ended up getting me a great discount on a stock that suffered a mid day flash crash, & I got it for 5% less (in 2011). Its been one of my best performers since.

Anyhow, I put a limit order in for a stock at the beginning of February, (AYR if you want to know) and for a price it had been at the previous month, but was about 1% below where it was sitting now. With the market's wild swings, it had to come down to that price fairly soon, right? Well... no sooner do I do that than the stock goes on a run leaving my order in the dust. Well, the order is good 'til the end of the month, and stubborn me, I leave it there knowing there's no way its coming back down to this price. But I just couldn't admit I missed out on the run up.

This past Friday comes, and I check the account, and mysteriously my order disappeared. I check and see that I got the stock at the price I was asking for. Did something terrible happen to the company? I do research and find the company reported earnings, beat estimates (and by a wide margin), and then the stock dropped 5% in minutes, just brushing the price I had my order in for. (This makes no sense to me, and to others that have commented online - looks like some big players mave have been messing with the stock - but I'll leave my thoughts on this for another time.) The price I paid is low enough that the dividend will be an effective 5%! And now I see the next date of ownership for the upcoming dividend is this Thursday, meaning I will be getting an additional 1.25% immediately for buying the stock. I swear, its better to be lucky than good (though being both sure is nice too).