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Market Covid Crash But Stock Went Up 330%

I decided to drop the daily blog posting here and diverted the energy to daily social media posting.

I thought it would be better if I had covered in-depth materials on this website instead. Pardon me if I hadn't been posting regularly here. Will make it a point to post weekly from now on :)

The S&P500 had dropped about 14% from its high since late February (as of this writing, 30 Apr).

Source: Yahoo S&P500 Chart

It feels good that the market has rebounded.

At the same time, it's also kinda eerie to know that we are in the midst of earnings season and the impact from the Covid lockdown may not have fully reflected in their records.

We can also foresee that the economy is definitely going to be taking a hit and it would take some time (or a LONG time) before it reaches its pace like it used to.

So why is this stock able to generate a 330% return?

I will document down some of the key takeaways from this investment.

1. Long(er) Investment Time Horizon

If there was anything I had learnt from my investment journey, it is...

Time in the market is more important than timing the market.

I am a big believer in holding good companies in your portfolio and ride through the downtrends.

It is like a relationship, there are days you are on cloud 9, and there are days where you probably feeling shitty to be in a relationship.

And given that I only have this company in my portfolio coming close to 2 years, all the more their returns surprised me.

Below is a chart of the comparison between the S&P500 and the company I held.


If you are wondering what is the company I held, it is none other than...Shopify (NYSE: SHOP).

As you can see, the difference has been outrageous.

And if you take a look at the lowest point (highlighted in red circle), my position is still up 137% while the market has become negative.

Hold it through the thick and thin. Because I don't think I can correctly predict the bottom of the market or any stock every time.

2. What is high, can go higher

When I asked people what they will do when their investments have hit a 100% return in less than 2 years, most of them would tell me they either will sell all their holdings or half of it and let the other half "run".

That is a good strategy to keep the money in the pocket.

However, if you are looking to make 300%, 500% or a 1,000% gain, then I sincerely doubt the above strategy can maximize your returns.

I have a friend who just called me this morning (true story). J asked me what are some investment opportunities he can go into.

He shared that he had regretted that he sold his Tesla (Nasdaq: TSLA) at $600+ after it had dropped from a high of close to $900.

My recommendation to him back then was, he should keep. Time is on his side and he has the holding power.

Still, sensing that he was jittery and worried if the price would go down further due to Covid crisis, I told him to sell if it gives him a better sleep at night. After hearing the words, he sold it a couple of weeks later.

His original purchase price was around $300 so he still made some decent returns.

Yet, when he saw the stock price rebounded back to $800+ (as of this writing), he felt frustrated.

He said...

Every time I buy, the stock goes down. Then when I sell, it goes back up.

Doesn't that sound familiar?

The successful traders I know use technical analysis and/or macro data to make a conscientious decision to maximize their returns.

The successful investors I know, use fundamentals. They rarely sell unless the initial investment thesis has changed or for personal reasons.

People who focus solely on the stock price, buy and sell according to emotions. I find this method emotionally the most strenuous and the results are inconsistent.

I know because I used to be like that. That's why I made a conscious effort to pivot to be an investor.

3. Throw The Numbers Out

I realised through my investment journey that the conventional method of valuation doesn't work well with high growth companies.

I learned this from David Garner, CEO of Motley Fool.

To put things in perspective, Shopify is not profitable and their Price to Earnings ratio is negative. This is because they are still losing money as a company at this juncture.

How can a "non-profit" organization (pun intended) generate such good returns (and in such a short period of time)?

The answer is...

Qualitative over quantitative

Having said that, such characteristics are very difficult to define. Especially when qualitative aspects of investing are highly subjective.

Maybe if anyone is keen, I can do an in-depth post on why I see in Shopify and how I value it. You can leave a comment below on the social media platform or on this blog.


There are many ways to profit from the market. I realised that

1. The longer I hold, the higher my returns are (mainly applicable to good companies).

2. What is high, can go higher (especially if the company is in a disrupting industry and has a huge tailwind).

3. Throw out the numbers. it doesn't mean I don't do any analysis. It just means I'm not fixated on any target price or specific valuation metric if I know this company has long term huge potential.

Stay safe and happy shopping on the market!

Disclaimer: This post is not to solicit investment nor serve as a recommendation to buy or sell the stocks mentioned here. It is meant as educational material. Do consult your financial advisor before making any investment decision.

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