Friday File: I Can’t Believe it, but Two MORE Buys

Updates on some Insurance Disruptors, and part two of the Annual Review gets to PW, IIPR, MPW, CHWY, SFIX and more...

By Travis Johnson, Stock Gumshoe, February 5, 2021


It’s been a phenomenal couple years for the Real Money Portfolio, but I should also note that this has been to some degree a “monkeys throwing darts” kind of market — as long as you did more buying than selling over the past couple years, and as long as you kept your exposure to some hard hit industries like oil and airlines relatively low, the wins were fast and furious as the prices of so many stocks soared to levels two and three times what I would have considered “expensive” a couple years ago. This can’t continue at this pace, for sure, but nor is there a current indication that it’s definitely going to reverse tomorrow. If you’re an individual investor trying to build wealth over the long term, then remember the goal: You aren’t here to beat the market and win every day or catch every wave, you’re here to build your portfolio.

If you’re also a gambler or a speculator, as most of us are with some of our money, keep that gate between the “real portfolio” and your “play money” closed TIGHT. You will probably feel the urge to throw more money at some wild speculations in the coming weeks and months, especially if this mania continues with new highs every week. We all look at the past and say that of course people were idiots for buying up condos in 2006 with no-money-down mortgages, and of course people were crazy for buying Cisco in 2000 at 30X sales… but it didn’t feel crazy back then to most people, it felt like what everyone was doing, and it felt like throwing your money at these speculative ideas was the only way to “get ahead” — the Fear Of Missing Out and the tendency toward herd behavior are not things you can turn off, they’re instincts that most people feel deep in their bones. And these days, they’re further reinforced by social media, and by our echo chambers of news and information that discourage us from rational thought, so everything happens even faster. GameStop was a microcosm of that last week for some traders who got caught up in the excitement, the FOMO chasing of the price and the fun of being in the exciting crowd, followed by the panic about losing everything when the shorts had capitulated and the price headed back to ...

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