Real-life portfolio guidance
Here’s some real-life guidance I’ve been giving to a long time friend of mine about his own IRA. This friend is a successful services business owner who used to work at one of the biggest tech companies in the world. With a kid and wife at home, he still makes good money and has some equity in real estate, his business and what not. He sent me the following email yesterday:
Based on your TradingWithCody.com post this morning, Do you think I should trim some Google and Apple stocks? And if so how much. I only have about 15 shares of Apple and 10 shares of Google. Let me know when you get a chance. Thanks.
He sent me the positions he has in that portfolio:
| Name(Symbol) | Quantity | Price | Market Value | Estimated Gain/Loss3 |
| APPLE INC (AAPL) |
15.062 |
$703.900 |
$10,602.14 |
$2,352.30 |
| BAIDU.COM – ADR (BIDU) |
16.000 |
$114.430 |
$1,830.88 |
$16.01 |
| FACEBOOK INC-A (FB) |
334.000 |
$22.930 |
$7,658.62 |
$1,278.12 |
| FUSION-IO INC (FIO) |
115.000 |
$31.180 |
$3,585.70 |
$328.00 |
| GOOGLE INC – CL A (GOOG) |
10.000 |
$727.900 |
$7,279.00 |
$1,163.95 |
| LINDSAY CORP (LNN) |
18.000 |
$68.540 |
$1,233.72 |
($24.61) |
| SEAGATE TECHNOLOGY PLC (STX) |
123.289 |
$29.690 |
$3,660.45 |
$140.25 |
I wrote him back: “Nice profits! Yeah, I’d sell like 3-5 shares of Apple and 2-3 shares of Google and 15 shares of FIO. Sell 34 FB too to lock in that sweet trade.”
I often tell people just ignore the number of shares that you own when it comes to a stock like Apple or Google. If it’s easier for you, just divide the stock price by 100 and multiply the shares by 100 and you get the same dollar amount anyway. And that’s what matters, you know? My friend above can just pretend that he’s selling 300-500 shares of Apple at $7 each or so. And 200-300 shares of Google. As for the FIO and FB, nothing wrong with locking in some gains in those two stocks too and rounding his share count down in those two some round lots to boot.
You can see from his list of positions that he reads TradingWithCody.com. I told my friend from the beginning when he came to me for help with his IRA portfolio, that he shouldn’t ever expect to get rich off a $25k retirement nut. But I do think he’ll end up with much more money in the long run by patiently buying companies that are revolutionizing their industries during panics and trimming/selling those positions when they’re up huge. There will be another panic in the markets, and since my friend above bought during the last panic, he can now raise some money and just leave it on the sideline for the next great pitch.
No trades for me today although I’d like to nibble on a little more DDD if it were to get below $35 or so. Patience and easy adjustments is key.
