We Bought Appian Stock $APPN with Our Stimulus Check
Are you a master stimulator? We get stimulated by investing in stocks
We bought Appian stock with our stimulus check.
Not only are we cunning linguists in le Smidlap Chateau but we're master stimulators. We also hadn't added a truly new stock to the The Smidlap Misguided Portfolio of Individual Stocks since fall or winter of 2019. So it has been about six months since we initiated a brand spanking new position.
It felt like it was about time to plant some more acorns in hopes of growing one into the next giant oak like Shopify. To review, we haven't been committing a lot of new money into individual stocks the past couple of years because We’re on the Glide Path to Retirement: Here’s Our Strategy Essentially our W-2 income went down to about half of what it was during our best earning years around 2015-16 but our quality of life has increased immensely. We also decided along that we would not sacrifice the things we wanted to do in life that cost some money like enjoying good food, wine, and a little travel just to continue chucking money into brokerage accounts. Essentially we stopped our "new money" Roth IRA contributions and after-tax contributions and mostly spend our paychecks now to fund our lives. We did, however, fund the Roths the past couple of years by moving funds from the after-tax account into the Roths and thereby shielding them from future taxes on the gains. I also continue to contribute to my work 401k but those funds are limited to cruddy index fund choices which have done markedly worse than our stock picks. The result of all those wordy words is that in order to initiate new positions the past couple of years we've had to sell underperforming investments in those accounts.
Keep funding the IRA's or avocado toast? The toast won.
In case you are new here we are not young people in our house.
We're fairly close to retirement age otherwise Mrs. Smidlap likely would have looked to a replacement full time J.O.B. when her long time record label gig took a steamer in 2017. We decided life is too short to munch on that new employee turd in a new gig with maybe 2 weeks paid time off. F' that noise. So we have pretty well held up work-wise with this global pandemic because I am Essential. Couple that with the fact that we can't freakin' go anywhere to spend and freakin' money and you have a recipe for a fresh contribution and a new buy without hurting out fun-life-factor. I still want our cash position in our asset allocation to hover around that 15% so if it gets too low I'll sell a little of one of those cruddy 401k index funds and add it to the Stable Value Fund which is a cash equivalent in my book.
Make a watch list
In July of 2016 I put together a watch list of 27 stocks plus the S+P500 that were mostly taken from my Motley Fool Stock Advisor subscription. I was just getting to know the service and had only bought my first Fool stocks a few months earlier so I made a list of names that I felt had promise. (Important notes: the recommendations in Stock Advisor are not the same as the free Fool articles you can find on the web.
Also, I have no financial relationship with Motley Fool outside of being a paid subscriber.) I made a hypothetical and equal $1000 investment in those 27 stocks and the S+P500 over a couple of days and the whole exercise took me a few hours. Of course I didn't buy all 27 stocks at that time because who in the hell has 27 large just hanging around looking for a home? I know we never rolled with that amount of cheddar! I kept an eye on those investments and even bought about 10-12 of them. Then, last year in 2019 I noticed even though the Fool Watch List had done exceptionally well I decided to sell 5 real laggards plus Restoration Hardware ($RH) which was a big gainer at the time.
To me, this mimics real life investing in that I gave the stocks enough time and probably "held" these losers longer than necessary so out the door went companies like Budweiser, Oceaneering, and Ulta Beauty. I "bought" 6 new names with the "proceeds" and you can see the new additions in the graphic below.
These look like they display poorly, but this is a Yahoo! Finance view
Can you read the data now?
Two things really stand out to me. 6 stocks have lost money or are in the red currently. I also sold 5 losers last November in order to buy the 6 new names. Not every choice is going to be a home run and this why we diversify and spread our bets. Shopify is up 1755% or more than 18 times the initial $1000 "buy." Netlix is better than 4x, Paypal is better than 3x, and 4 others have more than doubled. The return of the S+P500 during this time is 29%. This is the value of the whole enchillada:
So, with my advanced mathematical wizardry I calculated the return of 27 stocks as follows: Take the total and subtract the present value of the S+P and divide by the original $27,000 "investment."
$63,997 - $1291 = $62,706. $62,706 / $27,000 = 132% gain!
That seems a little sweeter than the 29% of the S+P500 the past almost 4 years.
I can hear it now practically. "But Freddy, you just got lucky by having Shopify in there! Waaaaa! Waaaaaa!" So for anybody crying foul we'll back out the $18,551 Shopify current value and divide the result by 26 instead of 27 as if we didn't have that one blockbuster.
$62,706 - $18,551 = $44,155. $44,155 / $26,000 = a mere 70% gain.
+70 is still better than +29 in the small town where I grew up, although the coastal elite may differ. This is a really long winded example of why I bought Appian Corporation today. It's also the reason I'll be planting more seeds of growth stocks in the coming months. I really believe if you take some shots and find some winners and leave them alone or add to them you can do quite well. Out of all the ways to invest this is one of them. That is all. Do your own homework and use your own noggin' or ask someone really smart about their opinion on the subject if you need advice. I'm just here to illustrate my experiences.
Why we bought Appian stock
They make software that helps/makes it easier to write and develop software. Does that make sense? I'm told it helps developers write code more efficiently and from the revenue growth it looks like they are gaining traction. For my dollar the world will continue to rely more and more on software in the future. We'll see if customers rely on Appian to help get them where they want to go. Here's a quote with more information. APPN quote from Yahoo! Finance. We paid $42.63/share.
Wasn't that boring and like a broken record? I really feel sorry for you loyal readers if you read that whole thing. I think on Friday I'll take a break and write about the thought police.