[Editor’s Note: This guest post is written by “Dr. Mom,” a regular reader, popular commenter, and previous guest poster who is anonymous to you, but not to me. We have no financial relationship.]

This post was inspired by WCI’s recent post on investing in Bio-Tech stocks. The post reminded me of a recent interaction with my husband (DD) who thankfully is back to normal, or at least baseline. Then, (Spoiler Alert) mix those ingredients with watching Kung Fu Panda with my son as he recuperated from getting his wisdom teeth removed, and out pops the post. As always, I am not buying anything from you or selling anything to you. I remain anonymous because who I am does not matter, and I don’t want patients seeing my posts come up if they Google search our name. I could be your pediatrician for all you know.

 

Last year the interaction begins:

Husband: Hey, come look at this cool YouTube video.

Dr. Mom: Cool. What’s that? Looks like something out of Star Wars.

Husband: It’s a drone. I think we need to look into investing in this technology.

Dr. Mom: Dinner’s ready. Let’s eat.

Fast-forward a few weeks:

Husband: So, I did some research on drones. I think we need to invest in Company A.

Dr. Mom: Are you sure your timing is right? The company just had a big run up. Maybe your idea is correct but you are late to the party. Have you considered Companies B or C? What if big players like Companies D, E, or F get involved? What do you think of that book I saw you reading, Devil Take the Hindmost by Edward Chancellor? Have you considered a sector etf? Might be a safer way to play your idea.

Husband: What’s a sector etf?

Dr. Mom: Dinner’s ready. Let’s eat.

Fast-forward a few weeks:

Husband: So I found a few sector etfs, but I can’t decide which is best. Can you take a look?

Dr Mom: (Really, there is a drone sector of the S&P? I guess Hubbie is not going to let go of this.) Sure. But, dinner’s ready. Let’s eat.

Fast-forward a few weeks:

Husband: So did you look at those etfs?

Dr. Mom: Of the three choices, I agree with the one you liked best. But, again, it has just had a big run up so maybe your timing is off.

Husband: So where should my entry point be?

Dr. Mom: I don’t know. Dinner’s ready. Let’s eat.

Husband: I am not going to forget about this. I know you read all that stuff on technical analysis years ago.

Dr. Mom: Well, then you know I think it is just an attempt to read the arbitrary tea leaves of crowd psychology, and that it was one of the few books in my life that I started and didn’t finish. You tried reading it and couldn’t finish it yourself.

Husband: Please?

Dr. Mom: Whatever.

A few days later:

Husband: So what is my entry level?

Dr. Mom: (Really? He knows I’m making this stuff up!) I think that $X is a good level based on Fibonacci regression analysis and the convergence of the 50 and 200 day moving averages. Blah, blah, blah…

Husband: But, that’s so low it will never get there.

Dr. Mom: (That’s the idea.) Dinner’s ready. Let’s eat.

Fast-forward a couple of months:

Husband: Hey that etf finally hit your price level today!

Dr. Mom: Come on, man. We are on vacation! Why are you even looking at stocks? Stop it! Want to play Bocce? Besides, you never want to buy it when it hits the price the first time. Let it bounce and get it when it hits it the second time.

Fast-forward a few weeks:

Husband: So I bought that etf today. It hit your price for the second time.

Dr. Mom: (Really?) That’s nice Dear. Dinner’s ready. Let’s eat.

So Kung Fu Panda fans, you know what’s coming. For those who don’t, the secret ingredient to stock picking is there is no secret ingredient. It is just random luck and chance. Ladies, if you see any of my husband in your partner, get involved in your finances! If you see yourself in my husband and you don’t have a partner, use a mentor like WCI.

Our compromise is that 10% of our portfolio is allotted to individual stocks. We count this ETF in that group. A year ago we had 5 individual stocks. Today we have 3 and this ETF. Although a small difference, I consider the change progress.

Kung Fu Panda

Skadoosh!

If you learn anything from our interaction, please let it be the following: When two strong willed, opinionated, and variably obstinate people work together and compromise for a mutual purpose they are both better for it. The point is not optimizing the portfolio, but optimizing the relationship.

SKADOOSH…

Best wishes as always.
Dr. Mom

What do you think? Do you or your spouse enjoy picking stocks or sectors? How do you limit the damage to your serious money? Comment below!