Well, not quite a billionaire yet, but there’s still time…
Shoe box investing is actually a term I got from my father. It basically refers to buying and holding an investment like a stock or mutual fund and putting in a shoe box under your bed, i.e. if you bought it, you should hold it, not watch it day-to-day, and ignore the ups & downs. Trust your initial investment strategy and ignore the market fluctuations. It basically follows one of Warren Buffett‘s investment recommendations stating the best holding period for a stock is forever.
Not that I want to argue with The Oracle of Omaha, but even he sells investments. I do agree that it’s best not to overly worry about the ups and downs. Technically, I still own the first stock I bought, though you wouldn’t recognize it. Back in the dark ages, when I was working for Southern Civil Engineers in Atlanta, I received an $1,800 bonus. That was a lot for me back then, but it was found money – money we weren’t expecting or needed, so I chose to invest it. We had just started using AutoCAD and I had researched computers to use, settling on Compaq. Warren Buffett also said, “Buy what you know.”, but I heard it as a Peter Lynch philosophy. At that time, with my research in mind, I bought shares in Compaq. Almost 40 years later, I technically still own it. It was bought by Hewlett Packard (HP) in a stock exchange. Since then Hewlett Packard spun off Hewlett Packard Enterprises in a stock split. I continue to hold both and my $1,800 has grown to $56k. HP also began paying dividends, so we have received thousands of dollars in dividends along the way. Likewise we own Microsoft, which I bought in the low $20s. I’ve continued to hold Microsoft which has not only grown in value, but has begun paying dividends as well.
I’ve sold some stocks along the way. Following the buy-what-you-know strategy, I bought GameStop for $10+/- per share. It fairly promptly fell to around $5. After that, in 2021, GameStop became a meme stock and rose precipitously due to a short squeeze. I could have held it as I thought it was a good stock, but at more than 20+ times our original purchase price, I took advantage and sold. Fortunately it was in Becky’s Roth IRA, so the capital gains were tax free!
I don’t always win. I bought Intel (INTC), which did fairly well for a long period of time, before dropping and languishing. I didn’t sell it as much out of procrastination as anything else. I started doing covered calls (a whole different topic!) and decided to sell covered calls on Intel, always at about 10% above the current stock value. Made a little bit of money on this, before Trump jumped in and gave them a boost through government acquisition of a portion of the company. This caused a jump to 4x my 10% call number and my shares were called away. In this case, I still made money, but I would have made more if I had just continued to hold it.
There are very few stocks I’ve sold overtime. I’m less attached to properties I’ve owned, though it varies. We still own the first property I invested in – 412 Lake Shore Drive in Culver. It was a fixer-upper that I converted to a rental. Other properties I’ve either flipped or converted. As a rule, I only buy what I think will appreciate. I have no special talent for that other than patience. I’ve learned that’s a rare trait. If you can develop it, it will serve you well.