I think it is always fun to share awesome investing stories, and I wanted to share mine. There aren’t a lot of great deals right now, so I’ve been spending most of my time reminiscing over past trades that have worked out well. Here is the story of my best trade ever (it’s actually two trades), and then I’d love to hear your best investments or trades ever!
My Best Trade Part 1
My best trade ever comes in two parts. First, this is 2008 and the markets are just starting to get a little shaky. I had a feeling about the financial markets, and so around the end of September, after the collapse of Lehman Brothers, I invested in the ProShares UltraShort Financials ETF (SKF). Yes, I know you shouldn’t use leveraged ETFs, but this was a different time and for a specific purpose.
Anyway, the week of October 3, 2008 is when everything came to fruition. This is when the market just fell apart. From Monday to Friday, the Dow Jones lost 10% of it’s market value – that was one week. And the financial sector is what drove the market down. My UltraShort ETF? It gained a nice 71% in one week!
My Best Trade Part 2
Even though the world seemed to be falling apart at this moment, there were a lot of good companies that were getting beaten down for no reason at all. Plus, given how the Fed was acting, in terms of bailing out companies now that they saw what happened with Lehman Brothers, I felt pretty confident in a long term play with a strong financial firm. I choose Goldman Sachs, and was able to buy it at around $77 per share. It did go lower during the crisis, but just one year later, it was back to the $160s, where I was able to sell at about $162. That was a nice return for holding the stock for just one year.
So What’s Your Story
Everyone has their whale story about a great trade or investment, or maybe you know someone who made a great call. Maybe they invested in Apple during the IPO? Or maybe they owned Berkshire Hathaway in the 1960s before it was worth anything? What is your best investing day ever?