AMZN question......

[Bluegrass]

I bought some a couple of years ago. It’s one of only a few individual stocks I’ve ever purchased. It took me a long time to pull the trigger. I watched it for a forever before buying it. It went up, up, up. From three figures into healthy four figures. It was painful missing those gains, but I finally jumped in. I’m now comfortably in the money due in no small part to its CV-19 run up. I got lucky. I’m not some savvy equities person.

So now here I sit with things like *pigs get fat hogs and get slaughtered/Nobody ever went broke making a profit* swirling around in my head. I don’t have a need for the proceeds. I’m not itching to re-deploy. I also understand from reading a bunch of the easily accessible information about what is obviously an immensely popular stock, that many analysts believe it will be worth more in 3 to 5 years than it is now. While conventional wisdom can certainly turn out to be wrong, that at least seems to be the conventional wisdom.

If it were to backslide two to three hundred points over the next six months (which seems possible), that would be very painful for me to endure. More painful than missing out on additional gains. Sell it all (my gut). Sell some. Sell none. Any advice would be welcome. The psychology of dealing with a “win” is unfamiliar terrain. I’m actually surprised how I feel. I read The Undoing Project and Thinking Fast and Slow a while ago. This episode has given me some new insight into the groundbreaking work of Tversky and Kahneman.

 

[kaneohe]

How about selling half? Then you feel like a winner no matter which way it goes. Goes up.......you're still participating. Goes down.......you cut your losses.

 

[Jerry1]

Has it gone up enough that you can take your initial investment off the table and leave the rest deployed? Nothing like playing with the house’s money.

If not, I’d pull some off the table (half) and ensure some gain. Don’t forget how much Amazon you probably already own if you hold an index fund.

 

[DrRoy]

Sell part.

 

[clobber]

I don’t have a need for the proceeds.

If it were to backslide two to three hundred points over the next six months (which seems possible), that would be very painful for me to endure. More painful than missing out on additional gains.

Those two statements seem at odds to me. Is the possible backslide "painful" because of the actual decrease in value, or a psychological thing? Presuming the second statement is accurate, seems like you know what to do.

 

[Aerides]

It's hard to advise without the rest of your financial picture and how much a part of it this is. Ultimately, if it's play money, it's gambling, and up to you if you let it ride or not. I did something similar with Facebook, got some on IPO day, haven't sold, it's been high but bumpy.

 

[Dash man]

AMZN has been good to me. I also initially hesitated to pull the trigger since for many years it wasn’t making a profit. But I finally bought some only to see it rise quickly to where I had made a six figure gain. I sold it and it continued to climb and I thought I sold too soon. Then it fell. I bought it back a couple hundred points below my previous sale price and it languished for a while. Then it climbed again. I’m just hanging on to it now unless some fundamental change in the company’s finances takes place.

 

[OldShooter]

Has it gone up enough that you can take your initial investment off the table and leave the rest deployed? Nothing like playing with the house’s money. ...

Ooh ... with respect: Bad idea. Bad mental accounting. Each of those dollars is equally valuable to the OP. If he can afford to waste any of them he can probably afford to waste them all.

The idea of "house money" is one that the behavioral economists use to illustrate humans' economically illogical behavior. Thaler: " ... the fact that some of your money has been made recently should not diminish the sense of loss of that money goes up in smoke."

 

[ownyourfuture]

I own a whopping 3 shares with a cost basis of $1,291.65
According to Yahoo the price to sales is 3.9

I compared that to some other stocks I own.

J&J 4.8
Microsoft 9.9
Intel 3.3
Tesla 4.9
Nvidia 16.5
Apple 4.8

Sounds reasonably priced until you look at the PE ratio.
It's at 112

Since I only own 3 shares, & it's a minuscule % of my portfolio, I'm going to hold.
Ultimately, you're the only one who can make the decision to take a little off the table, or let it ride.

 

[fisemper]

It's hard to advise without the rest of your financial picture and how much a part of it this is. Ultimately, if it's play money, it's gambling, and up to you if you let it ride or not. I did something similar with Facebook, got some on IPO day, haven't sold, it's been high but bumpy.

I bought FB IPO, then being younger and inexperienced sold during the very quick downturn . However a few years later I did get AMZN at 1K sold once it doubled and never looked back!