Buy milk and then a beach shack?
|Mar 26, 2018|
Better Have My Money: learning 'bout stocks so we all become rich
I watched the "DOW DROPS" headlines on Friday with some side eye as I was not used to those headlines applying to me. Although, considering my retirement money is in accounts invested in shares, it always applied to me, I just previously thought "this is only news for rich people!"
And yes this is a little later than normal... I am testing different times as if I am a genuine newsletter professional as opposed to someone who decided to meet her friend for dumplings and then went to the gym and didn't plan to send it this late actually but here we are.
Last week I received some feedback from reader Jonathan: "Been really trying not to say anything, and I thought you were saying 10 stocks instead of 10 shares intentionally, as a joke. Ugh, well, I hate myself for being the one to say it, but it’s 10 shares... I know you are from a superior country, but it’s just not interchangeable here. 10 stocks would mean 10 different companies."
OK so apparently they are not interchangeable words and I have been lied to. Or maybe Jonathan is wrong? Honestly I don't know, and maybe don't care but will try and right the write word at the write thyme and uphold my terrible standards of completely uneducated financial advice.
Speaking of being from a superior country, we have some special Aussie content today. My excellent pal who introduced me to buying shares, Jess Hopcraft, a production manager and cartoon screenwriter from Melbourne (she sometimes voices the cartoons!!!!!), agreed to answer a bunch of questions about her ~shares journey~ and it is not only relevant to Aussies, I promise you.
How did you get into shares?
Jess: A friend mentioned she was going to buy medicinal marijuana shares and they were cheap so I set up an account and bought some. I had Acorns for a few years but I would use it to like save up $500, and then spend it on an extravagance. I didn't think it was how I wanted to actually invest in shares. My brother however, waits 'til he gets to $500 in Acorns and then moves that over for shares. An important difference in Australian shares is that there is a minimum buy-in of $500 per share and then the fees are either set at around $15.95-ish or a percentage of the purchase, whichever is cheapest. I am with Open Markets because they were independent to the big banks but I still needed an account with a bank and they have different options so we chose Macquarie and there's no fees.
Why have you bought what you've bought?
Jess: CANN Group (weed), my friend's recommendation. Bought 1000 with my partner when they were 80c and now they’re $3.
THC (Weed) I wanted some others in the market. These have been a roller coaster.
Fast Bricks (Robot construction) my brother mentioned to me and they plummeted but they're also a share that will be worth more in like 2025.
WAM (Steady, pays and reinvest dividends) I wanted something that was slow and steady,
Argosy Lithium: a mate at work suggested lithium because you know... the future
A2 Milk: These are my sneaky gems. A2 Milk make baby formula which is one of our biggest exports and they also just started selling in the US too. Not to mention China changed their import regulations on milk products and A2 were the first to pass. These have almost doubled.
What have you learnt?
Jess: Specifically with A2 milk, I bought at $7ish dollars and everyone said they were really expensive because I suppose you buy 1000 shares at 50c for $500 and if those shares go to $1 or $3, you make a great profit of say $500-$2500. But if you buy a share at $10 and you can afford only, say, 50, they have to climb significantly for you to see a return. If they go up by a couple of dollars, to say $12, which is a big leap you make $100. But my A2 Milk are around $13 and I have 80, so I’m up by about $400 in around two months!
What do you find fun about shares?
Jess: The ups and downs. I became super obsessed when I started and it became like a game but I'm a little better now.
Have you made any mistakes?
Jess: I bought some additional THC shares from a customer offer which gave them at a reduced rate. At the time they were $1, the price was 68c, and I had bought others of them for around 31c. However they have gone down to 55c so buying the second lot higher bought the average price up and cut into my profit. However, I know they will climb back up and I have 2200-ish so if they even make it back to $1, I am in a great spot.
What's the most frustrating aspect of buying shares?
Jess: I think not being able to buy less than $500, sometimes I'd like to sort of just buy a sample amount with less risk.
When do you plan on selling your shares?
Jess: I haven't sold any and I have the date of when a year has passed since the purchase marked in my Google Docs so I avoid paying heaps of tax. I’m in it for the long game really, they’re separate to my other savings, so I don’t think about it as money I need.
Do you have any aims or plans for your investments?
Jess: I joke about cashing out and buying a shack by the beach but I’m a while away from that. I just want to have my money doing different things, I guess, but ideally it grows to something I can do something with? Was that vague enough? [editor - I am rly excited to stay in Jess's beach shack]
Do you have any personal rules for your investments?
Jess: I’m not interested in anything related to big banks and recently after the two dips in the market a mate of mine said invest in necessities not luxuries. Meaning if the world goes to shit, what will people always need. Bleak, but most of my shares follow that and they’re strong. Except these robot brick layers, there’s a while before our tradies get replaced I reckon. Lol.
Who or where do you get financial advice from?
Jess: I read a lot of articles. If I’m interested in a share I just google like crazy. My little brother has been into it a while but my recommendations to him made him more than his to me, haha. But yeah, I just look out for something interesting and research a lot.
How do Australian shares seem to be different to other countries?
Jess: I think the $500 buy in is the biggest diff. I think you can buy less than that once you own some but I’m not sure as I haven’t done that. I think the market is smaller significantly so it’s easier to get in when shares are super cheap. I imagine that’s a lot harder in the US.
Thank you Jess! My charity suggestion this week is the Lort Smith Animal Hospital in Melbourne, as a thank you to cat lady Jess. She has been my weed shares inspo from day one, even my Cronos (CRON) weed shares just kept dropping and dropping. I'm down 19% on this investment so far (it's fine Jess, I don't blame you) (yet).
So I decided to do the thing I did last week and bought another five while the price was at its lowest. I did this for two reasons: one, I’m not too worried about Cronos Group (CRON) — this is super early days for weed shares, they’ve just done some fundraising and and analysts still have it as a buy share, and two this then lowers my price paid overall. I feel like I bought most of my shares with them too high ($9.67 per share), so the cheaper shares have lowered that price to $9.22 per share, which feels mentally like all of them cost that much.
Here in the US shares plummeted Friday after Trump introduced new tariffs on China, and then jumped back up today (except for those damn UPS shares which I wish I'd finally dumped Friday and bought another two Netflix shares instead but I did not because I was, ya know, working), which is fine, I am feeling calmer about riding out the waves now.
Or at least, enjoying the ride?