When it comes to investments, thinking long-term needs to be my mantra as I do not have a whole lot of time to read and research about companies. My wife, who has strong finance background and sound money management skills, constantly reminds me of being thorough and do more research before I make any decision. Back in December, when Fannae Mae and Freddie Mac were about to be overtaken by US Government, their stocks went down to $2.50 a piece. My good friend who happens to be a millioanire by simply working hard as a Software Architect for over 30 years and saving little by little, told me, "Faisal, junks are junks, even if they are free. Don't buy junks." I told him, "How low can they go?" He said, "They can be $0; meaning bankrupted."
Well, I did not pay heed to his sound advice. I bought 50 shares of Freddie Mac, and 50 shares of Fannae Mae, spending $250. Now, They are worth $.50 a piece; goes up and down a few pennies on a daily basis. Yes, fifty cents for a stock of any of two Banking Giants that backs 60% of US Home Mortgage loans. Yes, Junks are Junks even if they are free; once feds took over, there were no reason for anybody to invest a dime in these banks; let alone a small amateur investor like Abunaser Faisal.
I will keep these two stocks in my portfolio for years so that I get remninded every time I am tempted to buy junk for great deal.
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