Wednesday, August 13, 2014

My rotten tomato

Hey Financial Freaks,

We all have come across a rotten tomato in our investing life (in all aspects of our life I'd say -- yes I'm thinking about you crazy woman from work!).

My rotten tomato right now is a company that not long ago was making those big Canadian Banks blush.

The money was coming in like Gold Diggers on rich men about to go six feet under.

Needless to say, it was making loads of cash.

And I am talking here about the biggest gold producing enterprise of the entire Mundo. Yes, it's Barrick Gold (ABX.to). Don't mention that name! Ok, you can...

Somewhere in 2011, I figured it would be a good idea to own some gold. But buying gold is quite complicated. And once you have it in some form or another, you have to put it somewhere. I won't be digging a hole in my backyard if that's what you are implying (geez!). Besides, my family and friends are so nosy they would end up finding it. Can't barely keep a Playboy magazine secret for pete's sake. (What's a man gotta do to get some privacy!)

Anyway, I decided it would be wise to buy shares of a company that actually produce gold. I waited a little time to see a dip in Barrick's share price. Finally at 40 something, I thought it was a good entry point. Since the share price is now clocking 20 $... it wasn't such a good idea. You do the math, Einstein.

The more the share was falling the more I was buying it to diminish my average price. But the share went as low as 15 $ So I had to stop buying it somewhere. Duh!

I now own 300 shares of ABX. It's way too much for my confort. It's the company I have put the more money in. Roughly 12 K$ Ouch,  « that's got to hurt I don't care where you from » (this one is from Seinfeld)

To make matters worst, they cut their dividend. It use to have a dividend of 0. 20 $ Now it's a poor 0.05$ a share.

Yes, Barrick Gold is going through a tough time (so is me without my Playboy magazine!). But so is the price of gold. In that respect, I will hold on to my shares and wait for a decent price to let go some of my position. I need to be patient.

If it wasn't for Barrick, my portfolio would be worth 5 K$ more. Ok, time to cry now.

The whole point is : you can't have it all as an investor. There will be ups and downs. And no matter how cautious you are, and especially if you hold more than 10 or 15 companies, you are bound to end up with one rotten tomato -- or more.

Mine is Barrick. What's yours? And how are you copping with it?


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