{"id":35235,"date":"2013-01-11T11:40:02","date_gmt":"2013-01-11T16:40:02","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=35235"},"modified":"2013-01-11T11:40:02","modified_gmt":"2013-01-11T16:40:02","slug":"lessons-from-2012-wait-before-lighting-that-victory-cigar","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/01\/11\/lessons-from-2012-wait-before-lighting-that-victory-cigar\/","title":{"rendered":"Lessons from 2012: Wait Before Lighting That Victory Cigar"},"content":{"rendered":"

By The Sizemore Letter<\/u><\/a> <\/p>\n

The market, like the Greek gods on Olympus, has a cruel streak.\u00a0 It seems to enjoy toying with us mere mortals, and it seems to enjoy teaching us a little humility as well.<\/p>\n

This time last year I threw my hat into the ring of InvestorPlace\u2019s \u201c10 Stocks for 2012<\/a>\u201d<\/strong> contest with my recommendation of Turkish telecom giant Turkcell (NYSE:$<\/span>TKC<\/a>).\u00a0 <\/b><\/p>\n

A monster run in the third quarter pushed me into first place, where I kept a tenuous lead up until New Year\u2019s Eve.<\/p>\n

As the final day of 2012 progressed, I had a comfortable 2% lead over the TheStreet.com\u2019s Philip VanDoorn<\/a> and his recommendation of Capital One Financial (NYSE:$<\/span>COF<\/a>)\u2014<\/b>a lead that I maintained throughout the day.\u00a0 Up by more than a percent with less than an hour until close, I felt victory at hand.\u00a0 I pulled a cigar out of the humidor, one I had been saving for a special occasion, and cut it.<\/p>\n

So there I sat, cigar in mouth and torch in hand\u2026waiting\u2026when a funny thing happened.\u00a0 In the closing minutes of the trading year, Capital One had a massive surge while my precious Turkcell flat lined.<\/p>\n

I lost the contest by less than 1% in the final three minutes<\/i> of the trading day.\u00a0 <\/b><\/p>\n

Needless to say, the cigar didn\u2019t get smoked.\u00a0 It got hurled at my computer screen in a volley of expletives I\u2019m not particularly proud of.<\/p>\n

Congratulations to Philip, by the way, on an excellent choice that would have earned his readers a handsome 38% return.<\/p>\n

What lessons can we learn from my humbling tale?<\/p>\n

To start, never get cocky when investing.\u00a0 This is an endeavor that rewards a cool, composed disposition.\u00a0 Your ego can be your worst enemy\u2014particularly for male investors.<\/p>\n

Yes, it\u2019s fine to engage in frat-boy-like banter with fellow traders on StockTwits<\/a><\/strong> or Twitter<\/a><\/strong> (or better yet, over a beer after you leave the office).\u00a0 I do it all the time, and it\u2019s all in good fun.\u00a0 Just make sure you keep a sense of humor about it, and accept that you will look like a fool now and then when you make your investment moves public.\u00a0 It happens to us all.<\/p>\n

Second, investing is a lot like horse shoes or hand grenades.\u00a0 In the real world, being close is generally good enough.\u00a0 Few investors who bought Turkcell at my recommended price would complain that it \u201conly\u201d returned 37% or that the Banco Santander (NYSE:$<\/span>SAN<\/a>)<\/b>, which came in third, \u201conly\u201d returned 26%.<\/p>\n

And along those lines, it\u2019s important to not get fixated on arbitrary timelines.\u00a0 In the real world of investing, you don\u2019t buy a stock and hold it for exactly one year, buying on January 2 and selling on December 31.\u00a0 If an investment is working, you let it run.\u00a0 And if it\u2019s not, you reevaluate.\u00a0 You either give the investment theme more time to work out, or you cut your losses and move on.<\/p>\n

For example, Arcos Dorados (NYSE:$<\/span>ARCO<\/a>) <\/b>had a terrible year, down 42%.\u00a0 But Josh Brown, who recommended, did not stand by idly while it sank.\u00a0 \u00a0After the stock gapped lower on a bad earnings release, he sold the stock<\/a> in the accounts he manages and lived to trade another day.\u00a0 That\u2019s what a good investor does.<\/p>\n

And now, it starts again.\u00a0 InvestorPlace just launched the \u201c10 Stocks for 2013<\/a>\u201d<\/b> iteration, and it should be a fantastic contest this year.\u00a0 I cast my lot with German luxury automaker Daimler AG (OTC: $<\/span>DDAIF<\/a>),<\/b> maker of the iconic Mercedes Benz. \u00a0But I also hold Jeff Reeves\u2019 Intel (Nasdaq: $<\/span>INTC<\/a>)<\/b> and Steve Freehill\u2019s Two Harbors (NYSE:$<\/span>TWO<\/a>) <\/b>both personally and in my Dividend Growth Portfolio<\/a><\/b> at Covestor.\u00a0 (Listen to Jeff and me discuss our picks in this podcast<\/a>).<\/p>\n

I encourage you to follow the contest.\u00a0 And you buy Daimler\u2014and it wins this year\u2014we can light up victory cigars together on New Years Eve 2013.\u00a0 The slightly-damaged stick that I cut on New Years Eve 2012 has been placed back in the humidor\u2026for now.<\/p>\n

Disclosures: Sizemore Capital is long DDAIF, INTC, SAN, TKC, and TWO.<\/p>\n

SUBSCRIBE <\/a><\/strong>to Sizemore Insights<\/em>\u00a0via e-mail today.<\/p>\n

The post Lessons from 2012: Wait Before Lighting That Victory Cigar<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

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