Austin describes how Shopify was his greatest selling mistake.
July 13, 2020
Most investors have stories like these about a stock we sold too soon, and it’s important to reflect on them. With many companies hitting all-time-highs recently, it feels like an opportune time to book some profits and call it a “win”. However, in my experience that has been a losing proposition.
Shopify (NYSE: SHOP) was the one that got away.
I first bought shares of Shopify around 2016 and added a few times in 2017 and 2018. If you look at this chart of what $10,000 invested in Shopify in 2015 (a year earlier than my initial purchase) would be worth today you might think I could be retired.
That’s right, $10,000 invested in 2015 is worth $287,610 today. But of course, I didn’t hold my shares. Instead, I sold way, way, way, way, way too early.
My average purchase price was $160.25 and I sold for an average of $202.85, a nice 27% return.
Now let’s put that into real money terms with an initial investment of $10,000.
I would have owned 62 shares and I would have made $2,670 in profit when I sold. This is where it becomes painful to read…
At the close of market Friday, July 18, 2020, Shopify’s share price was $929. That’s 479% higher than my average purchase price.
So my 62 shares would be worth $57,598 today bringing me to a profit of $47,598 which is $44,928 more profit than what I actually made. To make things worse, I owned more than 62 shares so the real-dollar opportunity cost is much higher.
What are my takeaways?
Here are some resources that are much more helpful than daily financial media:
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