With the stock's pop today, my Netflix position is up 7,744% (cost basis $3.21). A 78-bagger. Yowza. All credit goes to David Gardner, who recommended Netflix in Stock Advisor. His recommendation intrigued me enough -- along with my family subscribing to Netflix -- that Netflix was one of the first stocks I bought when I started investing in 2005. Unfortunately, I did sell 2/3rds of my position earlier this decade when I was raising some money to cover some college bills. I gravitated toward selling stakes in my biggest winners -- Netflix, Chipotle, and Monster -- which I still consider to be the biggest mistake I've made as an investor thus far. I trimmed the flowers -- the winners -- in my portfolio, rather than cutting the weeds. (Netflix is still my largest single position, but boy... it could be a lot bigger.) I would much rather hold a losing stock too long than sell a future winner too early. Chances are the latter will do far more to damage a portfolio's future returns than the former. You won't enjoy many multibaggers if you don't give the companies time to grow and prove themselves out over a period of years and decades. Few things are more powerful in investing than finding quality businesses and holding them with extreme patience. That "holding" part is easier said than done, but when you see what happens from diligent patience and holding of businesses like Starbucks, Amazon, and Netflix over a period of 10+ years, it makes it a little easier to sit on your hands. Foolishly,David K
> Unfortunately, I did sell 2/3rds of my position earlier this decade when I was raising some money to cover some college bills. I gravitated toward selling stakes in my biggest winners -- Netflix, Chipotle, and Monster -- which I still consider to be the biggest mistake I've made as an investor thus far. I sympathize with you on the sellers regret, but think this is a case of monday morning quarterbacking. What other choices did you have? Selling stocks that were under-performing. Selling stocks that were down. The chance that one of your 4 bangers will turn out to be a 17 banger is really slim. You have a better chance of a stock that has gone up 20% while the over all market is up 40% to double. (assuming you are limiting to 'good' stocks)NFLX is a fantastic story, but suggesting that you should not sell to pay for existing bills requires you to either put of other spending or borrow. The question then becomes, when can you enjoy the gains?Mark.
think this is a case of monday morning quarterbacking.Have to agree with Mark. Someone once analyzed Stock Advisor (or one of the Fool portfolios) and found that if you had bought every stock and never sold, your portfolio at the time would have been 50% Disney (because of the Marvel and Lucasfilm acquisitions or whatever). I don't think many people can sleep like that.If you cut Netflix from a 25% position to a 5% position, you have reason to regret. But if you trimmed it from 20% to 17% or something, don't kick yourself now. The education may have been a great investment too.Doesn't just go for money you need to spend, either. Let's say you trimmed NFLX 1 year ago for $140. It's up 80% since then -- that sucks! Except, if you'd used the proceeds to buy Square, you're up 200% on that.Nothing wrong with reallocating sometimes.Bear
David,I know exactly what you mean. I bought two small positions in Netflix back in 2005. Now, during that time period and the years after, I was always not making much money and I was raising two boys along with my wife. My house was old and needed a lot of work.In 2014, I was thinking about trying to do some work to my house. One of my ideas was to try to renovate my basement as it was dark, dingy and just there. I realized my position in Netflix had gone up enough, maybe 15-16 bagger, that I could pay for the work to be done.So, I sold my shares. I had my basement gutted, ran new sewer lines, added a bathroom, a new laundry room, closets, drywall, new wiring, tile and laminate flooring and more. It really looks good.Just this week, I looked at Netflix. Wow, if I had held all of my shares until now, I could almost pay off one of my new rental homes that I just bought in 2017. Or, I could buy another rental home.I have found out that I both love buying great companies as well as buying small single family homes to rent. And, speaking of Berea, as much as it would have been cool for my youngest son to have attended there, he is doing great at the USCGA. He's running in a track meet today somewhere in the north east. Fool on,mazske All positions are listed in my profile
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