Being a hockey fan, I buy a lot of jerseys on eBay. They're cheaper and usually in great condition. I bought my first one in May 2010 for my 33rd birthday when Montréal Canadiens had an improbable playoff run to the Eastern Conference Final, getting a white (Away) jersey to complement my red (Away) jersey, which was already so old that home teams wore white back when I got it.
Since then, I have bought several more jerseys (more than necessary, admittedly). While a team jersey can usually be found (well) below $50, most of the player jerseys still sell for $75 and (way) up. I bought my first player jersey this summer when I found a reasonably priced Patrick Roy jersey for $55 (before shipping & handling). Patrick Roy is the reason I'm a hockey fan today, and even more so, the reason I am a fan of Les Canadiens.
A few weeks later, I happened across a bid on a jersey for Alex Galchenyuk who was the third overall draft pick in 2012. The auction started at $19.99 with a Buy-It-Now price of $99.99. The shipping was reasonable as well, and it worked out that if someone won without another bid, then they would pay $27 (fittingly, since Galchenyuk's jersey number is 27). I followed the auction for a day, and with only three days left and no bids, I bit just to see how it ended.
Unfortunately, Alex Galchenyuk's contract had yet to be renewed during the auction. Therefore, no one else was willing to bid on the item. The auction closed with only my bid, so I happily paid the $27. The day after the jersey arrived, Galchenyuk re-signed with the team. Therefore, I tweeted about how I had just gotten his jersey off eBay for $27 (USD) the night before, a.k.a. #HumbleBrag.
I got a quick response asking for the name of the seller because that person wanted to see what else the person had available. The reality is there was nothing else that great of a deal. Truthfully, my jersey wasn't even that great of a deal when I bid on it because there was still a solid chance that he could have gone into free agency, and that jersey would have been outdated before I even got it.
However, I had high hopes for Galchenyuk regardless which team he represented, and the fact that Montréal is my favourite team would be a reminder that he started with the Habs. Putting money on it before he re-signed resulted in a sharp profit of owning a current player jersey at a fraction of its retail price.
Same as investing.
By the time you hear about a stock by word-of-mouth, its run is generally over. Buying a stock because someone you know got it for a deep discount would be on par with paying retail on a jersey that someone you know got for cheap. However, if you still believe in the company's future the way I believe in that of this hockey player, then the profits could be realized in the long run.
I have been investing in individual stocks for a little over a year now so there is not much personal wisdom that I can share. But I have only bought as much as I was willing to lose, and I have not backed down from any individual stock yet. It is entirely possible that one or more will become completely devalued. In fact, my first stock purchase was for a company in Chapter 11 bankruptcy, so I can reasonably expect that stock to be worth nothing soon, but even still, the amount remaining in that investment is as much as I would be willing to bet on an improbable turnaround. (Nevermind that stock became part of a pump-and-dump in September, rising from $0.06 to $0.64, but still below doubling in value for me, which has been my target amount.)
Based on my experiences thusfar, however, I am even more steadfast in my belief in index investing.(Not that trading stocks isn't a bit of fun in its own way.)
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