Snidely Whiplash
Recycles dryer sheets
- Joined
- Apr 12, 2009
- Messages
- 206
.... "Don't make decisions while emotionally distraught", or, just simply, "Don't Be As Stupid As Me". You are welcome to select the appropriate lesson to be learned from my (very poor) example. Hopefully this will help someone else to avoid making the same mistake that I have.
For several years we have had a stock portfolio of a size that would allow my wife and I to live comfortably, but not extravagantly, for the rest of our lives. We were primarily invested in large cap blue-chip stocks such as MO, JNJ, KO, UL, SPY, HON, BRK.b, etc. A 4% withdrawal rate adequately covered our living expenses.
In the middle of 2015 when the price of oil started to decline I started buying North Sea offshore drilling stocks (SeaDrill "SDRL" and Noble "NE") when I thought they were cheap. As the price of oil continued to decline I continued to buy more. As they got dirt cheap I sold large positions in my blue-chip stocks to buy even more. At no point was I overly concerned; I believed wholeheartedly that the price of oil could not stay low forever, and I had made it through the crash of 2008 and 50% temporary losses, I could certainly hold on through this little bump in the oil market and come out the other side in a much better position. The "temporary" loss of net worth really would not affect us too much because there was no reason I would need to liquidate these positions. I could hold on until oil recovered.
At the beginning of 2016 my wife was diagnosed with terminal cancer. My entire world imploded and the stress levels were off the charts. I spent the first hour of every day in the shower with the dry heaves and my entire body convulsing I was so stressed with worry dealing with this issue with my wife. I have absolutely no idea how I did not have a heart attack. During the first couple of months of the year our portfolio continued to decline. About the second week of February my portfolio was down 40+ percent. I was in pure panic mode. I was worried and scared that I was losing all of our money at exactly the time when we would most need it. In retrospect I was in no position emotionally to make any portfolio changes but pure panic and worry set in. I liquidated the SeaDrill and NE positions at pretty nearly the exact bottom. Of course, they have both somewhat rebounded off of their lows now.
I am now left with a portfolio with a value of about 60% of what it was a year ago, significantly less dividend income, and a future which all-around looks a whole lot less bright. I will forever feel shame over losing money that could have made the time my wife has left so much more comfortable and enjoyable.
I'm not looking for sympathy, commiseration, or anything of that nature. Maybe someone can learn a lesson from my stupidity (and it was stupidity in the truest definition of the word).
My "maximum tolerable loss" was clearly not what I thought it was. I clearly should have not made serious financial decisions in the midst of such emotional turmoil. I never should have risked our security out of greed for "a little bit more".
.
.
For several years we have had a stock portfolio of a size that would allow my wife and I to live comfortably, but not extravagantly, for the rest of our lives. We were primarily invested in large cap blue-chip stocks such as MO, JNJ, KO, UL, SPY, HON, BRK.b, etc. A 4% withdrawal rate adequately covered our living expenses.
In the middle of 2015 when the price of oil started to decline I started buying North Sea offshore drilling stocks (SeaDrill "SDRL" and Noble "NE") when I thought they were cheap. As the price of oil continued to decline I continued to buy more. As they got dirt cheap I sold large positions in my blue-chip stocks to buy even more. At no point was I overly concerned; I believed wholeheartedly that the price of oil could not stay low forever, and I had made it through the crash of 2008 and 50% temporary losses, I could certainly hold on through this little bump in the oil market and come out the other side in a much better position. The "temporary" loss of net worth really would not affect us too much because there was no reason I would need to liquidate these positions. I could hold on until oil recovered.
At the beginning of 2016 my wife was diagnosed with terminal cancer. My entire world imploded and the stress levels were off the charts. I spent the first hour of every day in the shower with the dry heaves and my entire body convulsing I was so stressed with worry dealing with this issue with my wife. I have absolutely no idea how I did not have a heart attack. During the first couple of months of the year our portfolio continued to decline. About the second week of February my portfolio was down 40+ percent. I was in pure panic mode. I was worried and scared that I was losing all of our money at exactly the time when we would most need it. In retrospect I was in no position emotionally to make any portfolio changes but pure panic and worry set in. I liquidated the SeaDrill and NE positions at pretty nearly the exact bottom. Of course, they have both somewhat rebounded off of their lows now.
I am now left with a portfolio with a value of about 60% of what it was a year ago, significantly less dividend income, and a future which all-around looks a whole lot less bright. I will forever feel shame over losing money that could have made the time my wife has left so much more comfortable and enjoyable.
I'm not looking for sympathy, commiseration, or anything of that nature. Maybe someone can learn a lesson from my stupidity (and it was stupidity in the truest definition of the word).
My "maximum tolerable loss" was clearly not what I thought it was. I clearly should have not made serious financial decisions in the midst of such emotional turmoil. I never should have risked our security out of greed for "a little bit more".
.
.
