# Best and Worst Financial Moves



## FrugalTrader (Oct 13, 2008)

Larry Macdonald contacted me for my best and worst financial moves. Here is what I came back with:

Perhaps our best financial move was purchasing a 2 apartment house within months of graduating from University. We lived in one apartment while leasing out the other. The rent helped pay for most of the mortgage which kept our expenses very low. This enabled us pay off our $50k student debt and a $25k car loan within a few years all while building equity in an investment property.

My worst financial move was perhaps purchasing Nortel while I was a student in University without doing any research. Nortel dropped from it's peak of $120 to $60 in a very short period of time. My thought was that it couldn't drop any further and that it would make it's way back to $120 in no time. Although it was only $3000 invested (which is a lot to a student), it was a painful lesson as I held the stock until it was basically worthless.

If you would like to share your best/worst financial moves, please do so here. 

*If you are interested in having your story published in the Globe and Mail, let me know before Thursday afternoon (Nov 12).*


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## brad (May 22, 2009)

My best financial move was selling my car and living in a cheap ($550/month) apartment in a commercial/industrial zone of my city, close by the train tracks, for five years. Selling the car allowed me to pay off my remaining debt, and living in the cheap apartment for five years allowed me to save up for a 20% downpayment on a house while also making decent headway toward saving for retirement.

The neighbourhood was pretty grim, but the apartment itself was nice -- three sunny bedrooms, one of which I used for my home office.

I used to joke that my worst financial move was moving to Canada from the United States, because my marginal tax rate doubled, but in the end I think I'm better off up here. Overall, I think my worst financial move was my failure to start contributing seriously to my retirement savings until I was in my late 30s. Both of my parents died relatively young and I figured my chances of living to see retirement age were slim, so it wasn't a priority. Now that I've made it to 50, I regret my youthful pessimism.


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## Rickson9 (Apr 9, 2009)

Worst: In our non-registered account we have a paper loss of $100,000 in K-Swiss stock since 2008. We still hold the company.

Best: Marrying my wife, but aside from that...including the paper loss in K-Swiss, our non-registered account has an average annualized return of 13% since 1997 (which includes the crash of 2000-2002 and 2007-2008). Going into 2008 our average annual rate of return since 1997 was 17%. 

Commissions are approximately 0.12% of capital deployed (ie $29 for $25K deployed); I should negotiate the commission down, but I haven't got around to it. Capital gains have been minimal since we don't sell, but a couple of our stocks have been bought out (Oakley by Luxottica and King World Productions by CBS and CBS by Viacom). We pay tax on dividends.

Past holdings included Natuzzi, Oakley, King World Productions. 

Current holdings include K-Swiss, Berkshire Hathaway, Fossil, The Buckle, and Columbia Sportswear.

Aside from K-Swiss, our worst performer was Natuzzi in which we purchased at $10 p sh. and sold 2 years later for $10 p sh.


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## FrugalTrader (Oct 13, 2008)

Rickson, this may be a bit off thread topic, but I noticed that your portfolio is heavy in apparel. Is there a reason for this? Do you prefer this sector? Or is it just that you like the brands and they have strong financial statements?


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## Rickson9 (Apr 9, 2009)

FrugalTrader said:


> Rickson, this may be a bit off thread topic, but I noticed that your portfolio is heavy in apparel. Is there a reason for this? Do you prefer this sector? Or is it just that you like the brands and they have strong financial statements?


The latter. 

I like other sectors, but companies that I am watching in those sectors haven't come down to the price I'm looking for (or get bought out eg. Barr Labs, Marvel, King World Productions, Wrigleys, T. Rowe Price etc.)

There have also been cases where I have the choice of buying a currently held company and adding a new stock from a different sector. I strongly disagree with the concept of diversification unless the new stock shows itself to be FAR superior than what I currently hold. 

Apparel is also very volatile, which is a plus.


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## michika (Apr 20, 2009)

Best moves:
- Working through University and exiting it with very little debt
- Learning early on to pay my savings first out of my check, I never miss the 30% that never touches my regular account.
- Opening a high interest savings account on my 18th birthday as my gift to myself

Worst moves
- Trusting my personal banker to handle a simple transfer from my RSP account to my trading account....he moved all my money out of my 2009 TFSA...it can't be returned apparently. 
- Believing for the longest time that I needed an advisor to handle investing beyond high interest savings accounts


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## refutor (Apr 5, 2009)

*re : Buckle*



Rickson9 said:


> Current holdings include K-Swiss, Berkshire Hathaway, Fossil, The Buckle, and Columbia Sportswear.


any thoughts on the Buckle since Goldman recommended them as a sell a couple of days ago

""We believe consensus estimates and the stock price do not fully reflect Buckle's near-term earnings risk and long-term growth prospects," Goldman Sachs analyst Nicole Shevins told investors in a research report Thursday, setting a 6-month target price of $27.

Shares fell $1.61, or 5.3 percent, to $28.66 in afternoon trading.

Shevins pointed to limited opportunities for Buckle's growth, such as little remaining square footage expansion potential and operating margins that are at peak levels and well above other specialty retailers in Buckle's category.

Shevins also said red flags have emerged that had historically preceded negative earnings results. For example, she said that in the past profit declined following a drop in the company's men's business. Shevins said earnings could turn negative in the first half of 2010.

The company last month reported that sales at its stores open at least a year rose 5.1 percent in its September period, just shy of expectations. The company also reported a 4.3 percent rise in sales at stores open at least a year in October, instead of the 5.3 percent increase Wall Street was expecting.

Sales at stores open at least a year are considered a key measure of retailer performance because they measure growth at existing stores rather than at newly opened ones. Buckle currently operates 405 retail stores in 41 states. Year to date, total sales have risen 15 percent to $623.8 million.

Shevins said that in the past, the stock has sold off sharply when sales comparisons turn negative."

http://finance.yahoo.com/news/Buckle-shares-fall-after-apf-2996842344.html?x=0

do you agree/disagree? thanks!


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## Rickson9 (Apr 9, 2009)

refutor said:


> any thoughts on the Buckle since Goldman recommended them as a sell a couple of days ago?
> 
> Do you agree/disagree? thanks!


I read it. I'm not really concerned. I wouldn't buy Buckle at its current price, but I'm not selling either.


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## logicfirst (Aug 19, 2009)

Best Moves:
- Started working when I was 15. 6.00/hr at a fast food restraunt.
- Living at home still. Saving for a massive downpayment on a home (135,000). 
- Not blowing my money on the small things. ie. booze, parties, ciggerettes, woman.
- Worked throughout college, came out with ZERO debt.
- Paying off the Credit card every month to avoid interest payments.
- Saved the majority of my paychecks (~60%). 

Worst Moves:
- Was holding HGD.TO recently. Averaged down my shares to 4.30, gold surged, panic ensues due to lack of discpline (started trading 3 months ago). Sold for lost at 3.44 (THE LOWEST IT EVER GOT), only for it too turn around the next day, if I had held it for 3 more days I would have come out with a small profit. Instead I took a $1000 lost, not much you think, but to me its hard earned money. 20% lost. The lesson was pricey, and I hope it will now serve me well in the future.


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## Dana (Nov 17, 2009)

Best Move - Taking advantage of stock purchase plans and group RRSP plans with employer-matched contributions

Worst move: bought Citigroup (c:nyse) at $33 per share averaged down to $30 per share. Dividend is now cut, the stock has consolidated and trades around $4 on a good day!


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## Alexandra (Apr 3, 2009)

*Best moves: *


Working several jobs during University to graduate with only a tiny amount of debt that took just 6 months to pay off
Getting my Master's degree, which has (so far) ensured large salaries in my field
Living in a very small house with a rental unit below before we had kids to save up a large down payment for our dream house
Getting a job within 5 km of my work and getting rid of my car
Seeing the potential in a crappy-looking house, buying it for $255K, fixing it up for $20K, and selling it two years later for $375K

*Worst move:* 


Buying into my own company's stock plan and RRSP plan - ALL NORTEL STOCK! Seeing that great head-start (investing in my 20s) go down the tubes


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## John_Michaels (Dec 14, 2009)

Best Moves
Panicking and selling my Nortel stock late 2001 - hoo hoo!
Using the $ and buying an old house that needed a lot of fixing and hence a low purchase price - no mortgage. The renovations are similar to a mortgage but a lot more flexible
Frugal mindset - Large salary, low expenses
Marrying a spouse with a frugal mindset, this has to be the best (luckiest) thing I've done

Worst Moves
Buy back into Nortel stock and riding it to the end. I was so annoyed that I even paid $ to sell it on the pink sheets
Buying MFC - but, always hopeful


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## Spidey (May 11, 2009)

Best moves: Scrimping and saving to buy into the Vancouver real estate market after we were just married and paying down the mortgage as soon as possible.

Worst moves: Listening to expert advice without doing "due diligence". I bought some stock when I was younger after listening to a writer of a what had been a fairly highly regarded Stock advisory letter. Later it had been found out that this guy was promoting the stocks and then selling. Fortunately it was a relatively small investment. 

Most recent worst move: Letting my emotions get the better of me after purchasing POT during the downturn. I bought it at about $85 and then saw it drop to about $75. When it went up again to about $87, I decided that I'd had enough and sold it. Again there was some "expert" on BNN projecting something like a $40 price. I'm not as vulnerable as in my younger days but I'm sure that had some influence. The price today is just over $124.


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## dogcom (May 23, 2009)

Best move was buying my house in Richmond B.C. when the real estate market was down.

Worst move was buying Laidlaw when it was very cheap only to see it get so cheap it was worth almost nothing when I sold it. And yes the talking head on BNN said when I bought it that he owned so much of it that he pretty well owned the company.


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## HaroldCrump (Jun 10, 2009)

dogcom said:


> Worst move was buying Laidlaw when it was very cheap only to see it get so cheap it was worth almost nothing when I sold it. And yes the talking head on BNN said when I bought it that he owned so much of it that he pretty well owned the company.


lol - he probably did.
And as soon as you (and others bought), he dumped his shares and got out.
Oldest trick in the game.


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## dogcom (May 23, 2009)

What is funny haroldcrump is at the time I was making good money trading internet penny stocks and knew it was in a bubble, so I was in control with my hand on the exit door. So I decided I should put money into a more solid company. So I lost money on Laidlaw instead of on internet stocks like everyone else.


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## ssimps (Dec 8, 2009)

BEST move: listening to my dad when he taught me to 'Pay yourself first'

WORST move: taking 20 years to realize that no one cares about your $ more than you do, and many people in the profession of supposedly doing so are lairs, perhaps not because they want to be, but because the institutions they work for make them that way.


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## cannon_fodder (Apr 3, 2009)

ssimps said:


> BEST move: listening to my dad when he taught me to 'Pay yourself first'
> 
> WORST move: taking 20 years to realize that no one cares about your $ more than you do, and many people in the profession of supposedly doing so are lairs, perhaps not because they want to be, but because the institutions they work for make them that way.


As they say, better late than never. I know a couple of people who left the profession because their conscience prevented them from conducting themselves in a manner that was not in the best interests of the client, but the employer.


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## Smac20 (Sep 7, 2009)

*best and worst*

Best Financial Move: buying call options on Amazon just before a huge pop.

Worst Financial Move: Attempting be a vulture and buy Bank of America at the end of last summer on margin.


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