Why Did You Sell Facebook [FB]?

"The biggest risk is not taking any risk... In a world that changing really quickly, the only strategy that is guaranteed to fail is not taking risks."

-Mark Zuckerberg

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I’m A Financial Professional

Last night I was out enjoying a cigar and doing a bit of work. That’s not an unusual circumstance… in fact, it’s one of my favorite ways to work. However, last night was interesting because of a conversation I had with another patron.

The gist of that conversation is below. For convenience, we’ll call the other person Fred.

Fred: How’s it going? You look busy at work… Are you a music producer?

Me: No… Those are stock charts.

Fred: Oh… that’s cool. I bought 3d Systems around $48.

Me: DDD?

Fred: Yeah… you know a little something huh?

Me: A bit.

Fred: The market is shitting all over it because they think this other company is the market leader. What they don’t understand is that the other company is international… DDD is a domestic company.

Me: I thought the news is always talking about us living in a global economy. I wouldn’t even consider the stock unless it can get above $54.

Fred: Yeah, but that’s just media spin. I could tell you why I bought 3d, but I’m a financial professional and don’t want to get myself into trouble.

Me: No, we wouldn’t want that. What kind of financial professional?

Fred: I help high net worth individuals manage their assets.

Me: So you’re a high net worth broker?

Fred: Wow, you know some terms too huh?

Me: A bit…

Fred: Yeah, I’m a high net worth broker.

Me: Oh.

Why Did You Sell?

Fred: I also made 40% in Facebook

Me: Nice.

Fred: I bought it at $22 and sold it at $31.

Me: Nice trade… Why did you sell?

Fred: The stock market is just one big casino. I like to take the gains when I can get them. I sold it at $31 to flip it into another low-priced stock and make more money.

Me: How is that flip working out for you?

Fred: Well… it’s impossible to make 40% on every trade.

Me: Facebook has done pretty well since you sold at $31.

Fred: Yeah, but I don’t look back… It could have gone down too.

Me: Agreed. But maybe if you had a consistent sell discipline, you would still be in the stock.

Fred: Nah… I need more action than that.

Me: I hear Vegas is nice.

Fred: Nah… I’m not a gambler.

Me: Oh yeah, I forgot… you’re a financial professional.

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Again, this was the essence of an actual conversation. It reminded me that so many of the folks charged with helping folks grow their money have not the foggiest notion of how to do so.
By the way... here's an updated look at DDD and FB as of 18 December 2019.

DDD Weekly Chart