Sunday, Aug. 29 update on our fearless, intrepid investor

We are revisiting our fearless, intrepid investor’s “fun” portfolio.

On Monday, August 23, she went to Toronto for an appointment and could not do her Monday Morning covered call business at 9:30 AM as she had planned. She got to her computer around noon. By that time, Novavax (NVAX) had gone up to $246.00 per share on heavy volume. So, she decided not to sell covered calls on it but simply hold the shares in expectation of further growth.

I am one day late in reporting the outcome as promised. Sorry!  Here it is.

NVAX did not go up as she expected. At the closing bell on Friday, August 27, NVAX ended at $226.27. She lost $19.73 per  share ($246.00 minus  $226.27) for a total loss of $19,730.00. ($19.73 times 1,000.00)

The loss took place in her “fun” portfolio which, like most “fun” portfolios, is not much fun right now. Her core portfolio consisting of 50% SPY and 50% TDB163, went up, of course; the market went up.

Why the loss?

By picking an individual stock, she ignored habit number three which is to buy an exchange-traded fund which tracks the S&P 500, such as SPY. That is, buy the market as a whole.

To succeed, make more mistakes. Mistakes are practice shots. Her failure as described here reinforces the wisdom of her core portfolio makeup.

Remember what you see below.

Resulting from its involvement in derivatives, in 1994, California’s Orange County declared bankruptcy.

Resulting from its involvement in derivatives, in 1998, Long Term Capital Management needed a $3.6 billion bailout from 14 financial institutions to prevent market panic and collapse of the entire financial system.

Gambling with derivatives, many individual investors keep losing 100% of their money.


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Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me