Hindsight is Unkind Sight

I should start an occasional feature about what a bad idea it is to follow the stock markets.


Case 1: Ford Motor Company. When the housing bubble burst last fall and took everything with it, I thought about buying shares of F. I thought about how well Ford should do when people realized the world wasn’t ending and decided to buy new American cars not built by a company teetering at the edge of bankruptcy. Ford bottomed out around $1, but I didn’t have cash and didn’t want to sell something else only to second-guess myself later.

Ford closed today at $9.90 a share. I deftly avoided that tenfold gain!


Case 2: Athersys, Inc. I actually did buy ATHX, a Cleveland company researching adult stem cell therapies, this spring when I was spreading around a little dividend money. I picked up a few interesting penny stocks, partly to diversify my tech-heavy portfolio but mostly for fun. Three hundred of this, three hundred of that, with the hope that more would double or triple than went out of business.

ATHX closed Friday 12/18/09 at $1.00 a share after opening at $1.01 – not too shabby since my cost basis is 64 cents. Yesterday morning, this happened:

Athersys, Inc. (Nasdaq:ATHX) announced today that it has entered into an agreement with Pfizer Inc. (PFE)…

Excellent news! ATHX closed yesterday at $2.40. ATHX closed today at $5.55. Guess which company I bought the least of when I was buying penny stocks in March. When I sold my Cedar Fair shares last Friday, guess how much of that money I invested in what I now know would more than quintuple over the next two days.

Hindsight: A great reason not to dwell on stock prices. Whether I do well or poorly, I always see how easily I could have done better. A bird in the hand, etc. etc…

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