A Year in Review: Investments and Missed Opportunities
By: Ed C
Tags: Money, Personal Finance, Investment

2020 has been a very eventful year. Oil took a major hit and COVID-19 hit the markets not too long after; Economies were shut down; workers lost their jobs; people lost their lives; the markets took a hit, and airlines were basically grounded.

Dividends were cut. You may be wondering why I mentioned that last and in a separate paragraph no less. It’s because I began investing as a income investor. I was going to invest in companies that paid dividends and reinvest those dividends whenever and wherever I could. But it didn’t quite pan out that way.

The first stock I ever bought into was Suncor Energy (TSX:SU) which primarily operates out of the Alberta Oil sands. It was supposed to pay a reliable dividend. And it did until Saudi Arabia and Russia had a lover’s quarrel. Before this conflict, I was making a nice $0.465 per quarter for every share I owned. Afterwards, with problems in the oil industry coupled with COVID soon after, the dividend was cut to $0.21 per share. Imagine what would have happened to me if I was actually depending on that!

It wasn’t all doom and gloom though. COVID did provide several of my stocks a decent boost. I had invested in several stocks that focused on providing distanced workplace solutions to companies in the months prior to COVID. These stocks (and myself in turn) benefited greatly from newer Stay-At-Home trends. My portfolio as mentioned in a previous post, is doing better now than it was before the pandemic. My Canadian portfolio is up 80% and if I were to sell today, I would make about $9000 in non-taxable profit (the benefit of a TFSA.)

My American portfolio on the other hand is up 42% from when it started (November of last year) with opportunities presenting themselves specifically because of the pandemic. When stocks were going down on March 23, 2020, I opened several positions in companies I wouldn’t have necessarily invested in before. I opened a position in Disney for instance (NYSE: DIS) who was suffering from the closures of its theme parks and theatres along with the major dip in the tourism industry. Other investors are now banking on the success of Disney+ and share prices are now higher than before the pandemic. It’s gotten to the point where I would not be investing in this company at the current valuation.

The recent Russian hacks (apparently) also helped my portfolio. Several months ago, I had invested in a cybersecurity company and was “fortunate” enough to find out that one of it’s competitors had been hacked. Naturally, other investors flooded to the company that I held resulting a boost in the stock’s price. I’m not personally sure how long this will last. But seeing it in my portfolio definitely makes me feel all warm and fuzzy.

But all of these gains came with a cost: An opportunity cost to be precise. For every share I bought since I began investing, there are investments that were on my watchlist that I did not invest in. These are my duds and the “ones that got away.”

#1. Square (NYSE: SQ)

This company began as a mobile payment company. My first encounter with it was at my therapist’s office when she took my payment with her cell phone. This fit my thesis perfectly. At the time (and even now), I was looking to invest in companies that “democratized” every day functions. In this case, Square democratized payment processing. Retailers didn’t need to use big card readers anymore and individuals could accept credit card payments.

When I initially added this stock to my watchlist, the market price was hovering around the $70 per share mark. I was (and still do) reading financial articles which suggested that this evaluation was too high. Being a Canadian, buying American securities can be an expensive proposition due to the exchange rate and as a result, I decided to hold off. Since then, the stock has risen to a high of $234.23 per share.

#2. Spotify (NYSE: SPOT)

This company needs no introduction. Spotify enables the streaming of music and various other forms of media. Personally, I use YouTube and just skip the ads whenever I can. I hear you can do the same thing on Spotify-for free. But apparently, this just isn’t an option for most people who end up paying Spotify for their services. Naturally, I held off on purchasing shares because I couldn’t understand why Spotify made money and I missed out as a result.

When I added Spotify to my watchlist, shares were trading at around $112. Today, those same shares are trading for $328.39. Ouch!

#3. Sunrun (Nasdaq: RUN)

I’ll admit it. I went on a renewable energy binge. I just think that’s the way the world is moving. I want in on it. My very first investment ever was in oil & gas, but I do have my share of “green” investments in my portfolio and watchlist. I began watching Sunrun after reading an investment article which brought the company to my attention. The article mentioned its extreme potential but also its apparent downsides (and there were supposedly quite a few). A few months ago, renewable energy stocks were fluctuating in the market but they do seem to be trending upwards. Nevertheless, I don’t think I’d buy in at the current evaluation.

When I first discovered this company, shares were trading at roughly $16.00 a share. Currently, shares are trading for $68.62.

#4. Tesla (NASDAQ: TSLA)

I think you’d be hard pressed to find anyone in North America who doesn’t know this company. It’s frustrated many short-sellers and benefited shareholders greatly and I hear it is currently working on new battery technology. Tesla stands to benefit from its self driving technology and trends favouring green technology.

But, a lot of people bet against Tesla. Many have been proven wrong of course, but the recent headline that caught my eye was a series of tweets from Michael Burry ( The Big Short is one of my favourite films). Furthermore, Tesla appeared to be overvalued even before it’s stock split and it’s price has only gone up since.

When Tesla split its stock, it was valued at roughly $446 per share (after the split). Since then, the stock has risen to $661.77.

Conclusion

I think it’s important for anyone looking to invest to do their own research. When I first started, I only knew maybe ten different stock symbols. Investment articles helped me find many more companies that I eventually invested in. But as you can see from above, they also hindered my portfolios growth. I didn’t invest in any of the four companies mentioned above because (in part) of the articles written about them. Those people were largely wrong.

Use articles as a springboard into furthering your research into companies but know that they could very well be wrong.

DISCLAIMER: The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. Furthermore, the writer own positions in several of the stocks mentioned in this article.