Tag Archives: cleantech

To Sell or Not to Sell: COMV (Loss $4515)

One of my earliest mistakes investing was getting over excited about how easy it was to invest in stocks. I first invested in mutual funds and index funds, and then quickly got into buying a little of this and a little of that. As I detail in Monday’s upcoming post, my portfolio has been up (28%!) and down, but right now it has practically lost all its gains. So much for compound interest.

Of all the losers in my portfolio, the biggest loser of all is Comverge. They seemed to be doing reasonably well when I bought it, knowing it was a risky small cap stock. I started out with a small amount of investment, a few hundred dollars, and somehow dollar-cost averaged down to the point where I invested $6252 in it. I was pretty¬†adamant¬†about not putting more than $2k into any one individual stock unless it was clearly an out performer, but I must have gotten caught up into the excitement of getting a “deal” on the stock as it went down and down and down.

The first time I bought Comverge, it was at $18 per share. I didn’t buy all of the stock at that price (luckily?) but today it’s a whopping $1.56 per share. All that’s left is $1836 of that stock. So right now I’m wondering if I should cut my losses and sell, or wait until the stock (maybe) bounces back a bit before selling (though that might just be asking to lose another $2000!)

Of course, the other option is to keep dollar cost averaging down. That is seeming more and more foolish at this point. It could have worked for some larger companies that just got hit in the recession (ie I wish I put all that money into Whole Foods at the time!) — in any case, right now I’m baffled by investing, and afraid that my minimal gains over the past five years will be completely washed out with a few bad stock choices. Besides, there has to be a better place to put $2,000 to perform than a stock that has lost so much of its value in the last four years, right?

 

The first Investing cut is the deepest

I’m an impulsive person, for better or worse. Sometimes I think about something for a long time trying to come with a rational conclusion, and then I make an un-wise spur-of-the-moment decision anyway. I need to stop doing that.

Well, about two months ago now I decided I wanted to start investing on Sharebuilder. It was a way for me to get to know more about the stock market, the overall economy and perhaps make some money.

My first purchase was four shares of COMV at $26 a share. This was a company I had been wanting to invest in ever since I covered it as a business journalist covering cleantech. I noted in a previous entry that I knew my experience covering them as a private company that was doing fairly well (yet not turning a profit) would not really translate to how they would perform as a public company. Regardless, I wanted in. I finally could, without any conflict-of-interest, try to nab a piece of a company that may eventually skyrocket to success.

A cleantech energy management company, they basically get contracts with utility companies to start demand response programs in place. These programs help the grid remain stable during times of high demand (like in the summer when everyone has their air conditioning on full blast). Instead of overloading the grid, the software and hardware installed by the company would reduce the amount of energy used in a building, therefore limiting the amount of demand on the grid. If this is done in a bunch of buildings, it can extremely reduce the likelihood of a blackout.

Anyway, I liked the idea, but didn’t do enough research about the financial matters of the company.

The thing is, they could still do good in the long run. They just scored a multi-million dollar contract with a utility, and maybe they can make a profit this year and the stock price will go up.

I feel bad for the folks who bought the stock at $40 and who were holding. I got in on the downward trend.

I bought four shares of COMV for $26 each.

The stock is now worth $14.

The other day it was back up to $19.50 and I figured if it got to $22 I might just sell it and put the money into one of my ETFs that are performing much, much better.

The next day it had dropped $3.20 a share. I’m not sure why it did this, after all the company seemed to put out good news the day before. Or maybe it was bad news in disguise and I just missed what the other investors saw. Or maybe the stock market just had a bad day.

Regardless, my little experiment is paying off in knowledge and not-so-much in profits. I invested in three individual stocks and three ETFs. All my ETFs are up, all my individual stocks are down. One individual stock (the one I’m talking about in this entry) is very, very down.

Lesson learned. I will not be investing in individual stocks anymore. I may or may not keep my four shares of COMV out of curiosity. And, right now I have little to gain by selling. My shares are worth a measly $50 and it will cost me $10 to sell them. I’d rather watch the money deplete itself entirely than sell at this point. I’m just glad I was lucky enough to splurge on the stock when it was at $26 and not $40!

With Sharebuilder I get six “free” investments a month (for a $12 monthly fee). I’m investing about $300 a month if my funds allow. So in the future, I’m going to move more into ETFs and on occasion put some money into the two individual stocks I own that will at the very least pay some sort of dividends (McDonalds and Whole Foods). I knew COMV was a risk from the get-go and I was right. Good to know my instincts are accurate sometimes, even when I fail to listen to them.