In case you weren’t aware, I’m pretty into personal finances – tracking, earning and growing my money. I bought my first share of stock in elementary school after finding a website for ‘young investors’. It was stock in Albertsons…a random grocery store chain. Haha, I didn’t make much money or anything but it did give me some exposure to the stock market! Alas, if only I had invested in other things that I was aware of as a young teen – Microsoft, Google or Apple – alas! 

I’ve come to learn over time that investing in individual stocks is probably not the best investing strategy and I’ve shifted 95%ish of my investments to index or low-cost mutual funds. I used to not be a believer in index funds until I reviewed my returns from my individual stocks (which I took a lot of pride in and monitored frequently) and saw that my index funds, that I gave 0 thought to actually performed better! Since then I’ve been a big believer in index funds and keep most of my money there. However, I do own a few shares here and there as part of my “mad money”. 

I’m always following the market and during the beginning of COVID, I watched many of my investments lose money – going down by double digit percentage losses. It was pretty gut wrenching but thankfully I knew to sit tight and thankfully with the rebound in the overall market; my investments have come back. I’ve learned a while ago not to attempt to time the market and that there will naturally be ups and downs. However, like many of us, I was pretty bored sitting at home without sports, new TV shows or things to do out and about aside from takeout. Naturally I started watching the stock market a little more as I knew that there’s always opportunity and big events (such as COVID) will always bring opportunity. 

With a few hundred dollars, I committed myself to investing in the stock market; just to try my hand again with individual stocks and see what would happen! About 6 months later; I thought I’d share my overall experience! 

What I was watching, buying, and why

Although I initially thought (and even wrote about it in an article) that COVID would be over probably by the end of 2020, it was becoming evident to me in May (when I started this whole stock trading experiment) that the world was fundamentally changing and that I should be investing my money in areas that I thought would grow long-term. Broadly speaking, these were the industries I identified that I thought would be winners coming out of COVID:

Technology – suddenly the world was working, teaching, shopping from home and if you didn’t think you needed an online presence or ecommerce or cloud solutions, everyone suddenly changed their mind. (Google, Amazon, eBay were my picks).

Insurance – suddenly people weren’t driving and putting off elective medical procedures and doctor’s visits. I figured that short-term many insurance companies would benefit from us just not using their services. (Allstate and United Healthcare). I will say that this theory has proven untrue; as people are back on the roads and seeing doctors. Auto insurers also issued big rebates throughout the summer negating any gains they’d keep for themselves (good for us consumers!) 

Food – people still have to eat and although in-person restaurants really got hit hard, I found what I thought to be a few winners in this space. I picked Grubhub (as the only publically traded food delivery – I don’t like Uber) and Dunkin Donuts. 

Cloud Storage – There’s a REIT (real estate investment trust) that owns and runs data centers so all the Amazons, Google, Salesforce, Microsoft and basically any other cloud based company needs servers in a warehouse somewhere connected to the internet to run their software. I figured picking a giant in the data center space would be great as more and more folks came online. 

Logistics – Delivery shot way up during COVID and I’m a believer that now that we’re basically doing everything online and having it show up at our door that we won’t go back to the brick and mortar ways of the old world. I picked a few delivery companies like SAIA and Werner (tractor trailer haulers) and UPS/FedEx as I can only see them getting busier here on out. 

Finance – COVID might finally be the cash killer event that moves us all to credit cards. All the big businesses already have a great way to accept and process credit cards but I figured the little guys might not. For that reason I picked PayPal and Square and I figured their businesses would only increase their credit card processing. 

Groceries – Less restaurants and take outs meant more groceries and for a while there people were really stocking up on pretty much everything (especially toilet paper). My real pick here was Costco! 

The rules that I set for myself

I of course tracked this in a spreadsheet and actually found that Google Spreadsheets can pull in stock prices from Google! I tracked the stock prices weekly and when I felt the moment was right, bought a few shares. The main rule was that after the stock appreciated 25%, I’d sell ¼ of my holdings, when it appreciated 50%, I’d sell another ¼, then same at 75% and then when I doubled my money I’d just be playing with the houses’ money! Haha, I didn’t hit 100%, 75%, 50% but did hit 25% on one! All in all I didn’t make a ton of money but it was a fun exercise for me to think about buying and selling stocks! 

What I ended up buying

Out of the 17 stocks I had on my watch list; I ended up purchasing 5 stocks. The 5 stocks I purchased were:

Google – When COVID hit, all businesses not in the cloud raced to the cloud and all businesses partially in the cloud rethought their on-premise software. Kids and teachers used Google Classroom, GSuite and Chromebooks. Google is a goliath in the internet and are only doing more and more and more folks on the internet doing basically everything from home had to be good for Google!

Amazon – It’s amazing how much we personally buy on Amazon and judging by how often I see the Amazon Prime van in our neighborhood; I imagine a lot of my neighbors are too! It’s funny, BabyMoneyFinance will probably more associate the mail with Amazon instead of the USPS! I figure that the trend of online ordering will not stop or decrease post-COVID! 

Dunkin – Sometimes being a smaller player dominated by a giant (Starbucks) still has plenty of room for growth and success. I figured that fast food with a great drive thru and online mobile app would do well. Little things like donuts and coffee go a long way in tough COVID times! 

Digital Realty Trust – Digital Realty Trust is a REIT which means they pay great dividends and own data centers all around the world. Similar to my theory on the world continuing to move the internet, I figured DLR would be a beneficiary! 

Werner – After doing some research (ok I started with Googling ‘best trucking stocks’), I found Werner and one other, and Werner paid a dividend so I ended up going with them. My idea that logistics like UPS and Fedex were doing well (hindsight I should have just bought that stock) transferred into trucking companies doing well too. 

How things fared 

Google – Up 21%. As I predicted, Google was definitely a beneficiary of continued growth in online advertising (search and YouTube) and Google Cloud. 

Amazon – Up 1.8%. I didn’t see as much of a gain here in Amazon as I would have hoped, despite literally every weekday seeing the Amazon Prime truck driving around my neighborhood. Despite showing huge increases in sales, they seem to have struggled with costs related to COVID. I’m still a believer and can only see them continuing to do well. 

Dunkin – Up 56%. I got pretty lucky with my Dunkin stock as they recently announced that they were being bought out by a private equity firm for a nice healthy price premium to where they were trading prior (in the high $80s) and are selling for $106/share. 

Digital Realty Trust – Down 9%. Digital Realty had a bad Q3 and actually reported a net loss per share which isn’t ideal at all. Despite me thinking DLR would benefit hugely from more of the world moving to the cloud, it hasn’t worked out for me as I intended! They still pay a dividend and I’m not ready to sell them yet. 

Wener – Down 10%. Based on their recent earnings report, it seems Werner is not doing as much business as they had hoped. I think that COVID with economies being in various stages of being open and doing business has been tough and there’s still a driver shortage with fewer people wanting to be truck drivers. 

So, I only (recently) got to my first threshold for the rules I set to myself (sell 1/4 at 25% gain, another 1/4 at 50% gain) with Dunkin but actually got lucky procrastinating as it jumped another 25%!

Summary

Once again, I’ve proven that I’m not a genius stock picker and although I had a few big wins, I also had a few losses too. Although this was a fun exercise I’m not changing my strategy of keeping 95% of my investing money in index funds (which grew about 10% since June when I started watching these stocks).