The story of this investment began with a casual conversation with a friend. He mentioned a Chinese electric car brand that could potentially rival Tesla in the years to come. Intrigued, I conducted my own research to form an opinion. On September 20, 2018, I made the decision to take the plunge by purchasing 100 shares of NIO. A few weeks later, when the stock price dropped, I seized the opportunity to buy an additional 200 shares, and then another 315 a few days later.
Account 1
Account 2
With an average purchase price of around $7.95 on the first account and $8.00 on the second, I began to feel stressed when the stock price fell to $5.90. Fearing greater losses, I decided to sell as soon as the price rose back above $8.00. Subsequently, I realized that my reaction was driven by emotions rather than a logical investment strategy. (Account 1 : 2416.01 - 872.95 - 1512.95 = +$30.11, Account 2 : 2540.21 - 2524.84 = +$15.26).
Account 1
Account 2
After deep discussions with my friend, I fully grasped the importance of patience and emotional control in the realm of investing. I realized that the goal of investing is to generate long-term value, and obsessing over daily fluctuations in stock prices is not only futile but also strongly discouraged due to the impulsive decisions it can lead to.
Armed with these new insights, I made the decision, the very next day, to reacquire new shares. What was particularly interesting in this story was that the purchase price of these new shares was $7.60, lower than the price at which I had previously sold them. This situation allowed me to acquire more shares with the same initial investment amount.
Account 1
Account 2
On January 3, 2019, a shift in strategy occurred. I made the decision to sell my NIO shares at a loss in account 1. Unlike the initial sale, this decision was not driven by stress but rather by a deliberate strategic choice. Indeed, the value of one of my other investments (TRVN) had recently plummeted significantly, and I saw this as an opportunity to lower my overall average, thereby increasing my future profit potential. That's why I chose to sell some of my NIO shares to acquire a larger number of TRVN shares at a significantly lower price. (1931.02 - 2436.95 = -$505.93).
Account 1
About a month later, I decided to implement the same strategy by selling the remaining shares in account 2. However, this time, the net result was slightly positive. (2459.02 – 2436.95 = +$22.07).
Account 2
Since then, I have never considered reinvesting in NIO, even when, on October 2, 2019, its stock was trading at just $1.19. Although this entry price seemed extremely attractive given the company's future potential, I made the decision not to continue investing in NIO. Having specialized in the field of biotechnology, I preferred to focus my efforts and resources on this sector rather than further diversifying my portfolio. To date, the highest price reached by NIO's stock was $66.99 on January 11, 2021.
Moral of the story: This experience has taught me that patience is an essential quality when it comes to investing. Furthermore, mastering one's emotions is crucial to becoming a successful investor. Unfortunately, this lack of patience will still challenge me throughout my journey in the world of stock trading.
Overall results : 30.11 + 15.26 – 505.93 + 22.07 = - 438.49 $
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