Modern Day Lessons in Investing
Here’s a short story about PG’s entry into and departure from my stock trading/retirement-investment account from 2018. Lessons still hold true – very true.
Here’s the setup.
On December 21, 2018, the Beyond ETFs Zone Changes report indicated that one stock had fallen into the Avoid zone and therefore should be sold. Being a follower of the Brockmann Method, I sold that stock on December 24, 2018, the next trading day. The highest ranked stock in the Buy zone that I did not already own was PG, so I immediately bought it at $88.55.
Less than three months later, PG also fell into the Avoid zone (past position 25 of the rank ordering of the S&P100 stocks), and on March 14, 2019, I sold it at $101.21.
Here’s the summary.
- $ Gain per share = $12.66*
- Percent gain per share = 14.1%
- Days owned = 80 days
- Annual Rate of Return (ARR) = 84%
Here’re the Lessons.
Not every stock purchase and sale following the Brockmann Method results in nice gains like this. Some are better, some are worse. Many are positive, some are negative. It’s important to note that in these negative circumstances, often times there are factors and conditions beyond the control of the investor that are at play (it is a market after all).
For example, BA joined the Buy zone and as a result of another stock falling into the Avoid zone (where it was sold), I purchased Boeing on February 20, 2019 at $420.88. Note that on February 14, 2019, Airbus (a competitor to Boeing) cancelled their superjumbo A380 aircraft, which confirmed Boeing’s superior market share and product portfolio, so naturally I felt that BA had a lot going for it. However, on March 10, 2019 a second Boeing 737 Max crashed causing the Chinese and British and finally the US aviation control authorities to order the grounding of Boeing’s newest airplane design. A week later, BA fell into the Avoid zone and was sold at $371.74, sadly, less than what was paid. *
And, two weeks later although BA is at $374.21, it is in position 36 (Avoid zone). The stock I purchased in its place is up $4 for a 2% gain, and on target for an annual rate of return at 84%. This shows that ditching BA in favor of a faster growing stock, even if it resulted in losing a few dollars on the sale, is on track to proving to have been a very sensible trade-off.
Fortunately, quick losses don’t happen particularly often, but when they do, I get reminded of the importance to be evenhanded and professional in how one responds. If you respond appropriately to the signals inherent in the Brockmann Method, (sell when a stock falls into the Avoid zone, buy the highest ranked stock not already owned) revealed in Beyond ETFs you can be confident that you will beat the Index – over time, not all the time.
And as it turns out, that is a wonderful and achievable goal – beat the Index!
* I recently became aware that this transaction is eligible for participation in a Securities Exchange Commission distribution paid by legal actions against The Boeing Company and the former CEO (David Muilenburg). You can check your standing at BoeingFairFund.com. Claims must be submitted before October 17, 2024, so don’t delay.