What I’ve Learned During the Corona Crash in March as a 19 year old, Investing
The stock market has been hectic in the last few weeks. I’ve learned a lot. Here’s what.
I’m 19. I’ve been investing since I was 12 or 13 years old with the money I earned from delivering newspapers, writing articles, making pictures and so on.
So far I have only experienced major corrections in the stock market, but not such a big crash. I remember the correction at the end of 2018, where Apple at some point lost over 30 percent of its value. Because I had been studying this company for years before, I knew what I was buying and was buying a lot. This paid off very well. Over the next 12 months, the share price rose almost 100 percent.
The current crisis has also provided many buying opportunities. Of course I don’t know if the bottom has been reached yet. And as of right now I don’t have put all my crash money to work.
I would describe myself as a ‘value investor’ who invests in solid stocks such as Apple, Amazon, Berkshire Hathaway, Facebook or Tesla, which should be worth considerably more in the future. With 10 to 20 percent of my assets, I take much higher risks. Recently, for example, I have invested in cruise stocks (Carnival, Royal Caribbean, Norwegian) or Sabre. I am betting that they will survive the crisis and that travel will go on in the future once this is all over. Which it will.
This three lessons I’ve learned, relearned:
The bottom is zero and nothing else
It sounds like a no brainer and is a bit idiotic to write about this point. Every stock can go to zero and become worthless. In theory everyone knows that. But I believe it’s something you must’ve experienced to really understand that. For example: Just because Carnival Cruise Line (CCL) stock crashed down over 80 per cent from the $50s right under 10 bucks doesn’t mean it could go even lower. After a few days it was at not even 8 bucks.
Same goes for Shell: Just because the share price never was under 18 bucks for well over 10 years doesn’t mean it never goes under that line — it was down to 10,30 at one point.
When you’re investing, you can lose everything.
Don’t just look at the price
„Just looking at prices is gambling, not investing,“ Warren Buffett said. With every stock you are buying a small fraction of a business you wanna hold for years to come.
So you should make sure it’s a damn good business. Because even when the stock price gets hit, it is no problem, as long as you believe in the company, cause you know what’s in your portfolio.
Know what companies you hold
So before investing I make sure to check the fundamentals, reading tons of articles, 10ks from competitors. I also watch interviews of the CEO to unterstand what their goals are, what’s driving them. After doing all this work I gain a lot of confidence to hold on to the stocks in my portfolio to not panic sell when it gets though.
I have not sold a single stock since February. And I am not planning to, even if there is another crash in the making. Then I will buy more. For example Apple.