The agony and ecstasy – a new investor’s story

*Sam Doe
2015-11-26 12:16
iStock_beginners_luck iStock

A Fin24 user, who wishes to remain anonymous, had never bought any shares before in her life, so was a real newbie. Here’s how she struck gold – and also bought a bit of a lemon.

All my life I have basically lived from pay cheque to pay cheque. It’s what you do when you choose to work in the helping professions. No major debts, (except bond repayments), no major luxuries, and learning to make do with what you have.

You know where to find bargains, and you simply can’t afford to do labels. Not that that is important to me, anyway. If it had been, I would have chosen another profession.

But even so, the desire for financial security escapes nobody – not even the most committed creative and charitable types. Nobody wants to be old and poor.

A small inheritance

So when a small inheritance came my way (R100 000 – which may be small to some people, but to me it felt like an absolute fortune), it took me a while to decide what to do with it. The process was very similar to having fantasies about winning the lottery: what I would buy, where I would go, whom I would help, what I would drive. You know the drill.

What was tempting was to buy a new car – mine was decidedly long in the tooth, although still reliable and functional. But although a good car is an investment in your safety, it is not a financial investment. And a financial investment was what I needed.

So after doing a bit of research and speaking to a few people who knew a lot more about these things than I did, I decided to spend the lot on shares.

All of it: it was tempting to cream a bit off the top and go on a shopping spree, but I held back. This was just as well, because when I contacted the investment company, it turned out that R100 000 was the minimum amount with which I could open an account.

Signing on the dotted line

The day I went to sign the papers was a bit intimidating: I was acutely aware of the fact that the kind staff members at Investec were used to working with staggering amounts of money, and that my offering was rather meagre.

I decided to put all my eggs in one basket, and bought R100 000 worth of Naspers [JSE:NPN] shares. This was December 2013, and the Naspers share price was at an all-time high, having just breached the R1000 mark.

At the time people were saying that they were overvalued, and would soon fall, but I stuck to my guns.

Call it instinct, or beginner’s luck, or whatever, but watching this share climb over the past 23 months has been giddying.

I have no need to ever go to a casino – all my gambling needs are entirely satisfied by the weekly checking of this share price.

The high and the low

In less than two years the value of those shares has more than doubled. If it had been any other investment, this meteoric rise would have made me deeply suspicious, because in a way it actually does feel too good to be true.

Today my investment is worth R215 700 – and climbing. Nothing else that was legal could probably have given me this return.

But it has not been moonshine and roses all the way, and I do not possess the magic touch, as my next investment clearly showed me. Just before the oil price fell, I invested a Christmas bonus in Sasol [JSE:SOL] shares.

Fortunately the amount was much smaller than that of the first investment, as the share price has fallen by a third – and shows no signs of getting back anywhere near what I paid for them. But you only lose once you sell, so I haven’t. Scratch the surface of any investor, and underneath you will find an eternal optimist.

So what now? I hang on for as long as I can. I might be spending about a quarter of these Naspers share gains on a second-hand car as the old one is starting to get to the end of its natural life. Nothing fancy, you understand, because now I have been bitten by this investment bug, I am truly hooked.

I have just checked: the Naspers share price seems to be at yet another all-time high this morning of R2 233.90Let’s hope it lasts. And no, I haven’t checked the Sasol share price – I am simply too scared. This investment game is not for sissies.

* Sam Doe is the user’s pseudonym.

** Fin24 is part of Media24, a division of Naspers.

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