I am a kitchen table investor. And you know there are a lot of other things going on at the kitchen table, too. I am responsible for most of them. Life swirls with the kitchen table as it’s focal point, so sometimes investment activities get lost in the piles and time warps daily life.
That is one reason we are so careful about which companies we invest in. I don’t have the time to watch them every day, making sure company management is wise and reliable. Still, we DO want to periodically evaluate. Sometimes we have saved enough funds for another purchase. Sometimes we just need to take the pulse of the companies or be aware of opportunities.
When it has been a while since I’ve done any very deep swimming in my investment things, it is challenging to get back into it. I try to read snippets about the stock market and economics here and there, but that is not quite the same as getting into it up to my neck. When decisions need to be made, even if it is just about whether or not to buy more of a stock that is already owned, it can tax the brain and the psyche.
Some people live and breathe the stock market. I try not to let that intimidate me. It is hard to tell from what people write how they are actually doing with their investments. Some results get published, but out of the things that I see, it doesn’t really seem that all these investment gurus are becoming millionaires! Even if they are, that shouldn’t stop ordinary me from doing what I can with my resources.
Here is where I emphasize again that this is not gambling. There is risk, like there is in all of life, but we take (semi?) educated risks in many areas. We don’t have to completely understand something to take a risk. For instance, I ride on airplanes to Hawaii sometimes. Mostly because it is too far to swim. I really don’t like or understand airplanes, but they do seem to fly. Most of the time.
Really, I hardly understand about car engines more than I do about airplanes, but I manage to effectively drive one to get things done for the benefit of the whole family. For that matter, I don’t know what makes seeds sprout or exactly why soap helps clean the clothes. But I work with what I know to the best of my ability because it is ultimately worth risking.
I can imagine someone who has never been around soap saying, “Oh, I can’t use that. I don’t know what it is.” Those familiar with soap might laugh, but that is just how many people act around savings and investments. However, money and money management are a basic aspect of life.
There may be the “soap experts,” who (think they) know exactly how it is made and all it’s chemical tendencies, but nearly everyone can learn to use soap. Plus, a little experience with soap goes a long way. So it is with the stock market. Think about one load of wash or one shower or one stock decision at a time. Why get all stressed out about all the clothes that have to be washed in your future? Or how much water you will have to pay for to take a life time of showers? Or whether or not every stock purchase will look good on any given day? Play in the water, make some bubbles, and get some things clean.
Okay, maybe I should have used a camera analogy, since I did say “snapshot” in the title, but I have been running laundry and doing dishes throughout the day. The fact is, I have begun to again do what I call snapshot research of companies. I gather information about what the company and our particular investment look like right now.
- It is a picture of the value of the investment to us,
- set against the backdrop of company history,
- then highlighted by what the news portends of the future.
Then, my husband has been looking over what I have gathered and we’ve agreed on action. Little by little, over the years, with patience and fortitude, this process is bearing fruit. Did I mention patience?
It really helps that I already have my stock market notebooks set up with a section for each company’s stock we own. I can review the dividend record and compare company statistics from when we bought it or last time we evaluated. Since writing notes helps me process and remember information, I also title and date a blank notebook page to write down details that come to my attention. Basically, anything that I want to remember in particular, and for going over things with my husband, goes on this piece of paper, like “shale production helping, key statistics running same good to slightly better, stock holder equity ⇑ over last 3 years, also quarterly.” Some of these things I just know he is going to ask, so I try to be prepared.
After I have made these notes, I take a moment to be satisfied that I now know what some of these things mean! If I don’t know what they mean, I have a good idea of where to look them up, and even have some idea of how important each little fact is in the whole scheme of things. I truly think some people came up with many of the statistical measurements and ratios because they were frustrated that they can’t predict the future. They still can’t, but they now have more variables to talk about!
This week, we sold the stock from one company because they went into significant debt. Very simple evaluation. This time around, we still came out ahead with the investment. We sold options on a couple of other stocks that we own. I may write about that another time, but it is a little more complicated than straightforward buying and selling of stocks. However, if I can learn to understand it, you can, too. On the other hand, there is no pressure to learn it. It is not necessary for basic investing.
Breaking your stock evaluation into manageable segments is important. My snapshot approach helps me do this in a way that is both possible for my schedule and comprehensible for my mind. It even makes it more possible for me to help pass on to my children what I have learned. It may be a word and statistical picture of sorts, but if I sketch it in terms that I understand, it is worth a thousand words.