Everyone is Hyped About Investing Again
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Now, I understand this may not be all that fascinating. However, I assure you that it was. What they were talking about was investing in junior oil and gas plays that they were hoping would make them rich. I got the impression that one guy worked at one of the telecom companies in Calgary (based on the logo on his bag – an assumption but probably a safe one). He said that he just put about 25% of his portfolio into a bunch of juniors that a friend of his, who was a broker, suggested at a party he was at a couple of weeks ago. I could not believe what I was hearing.
The markets have been doing pretty well of late and there seems to be a lot of confidence in the market. What seems to happen at times like this is people with no business investing in risky juniors or other small-caps jump in. Everyone thinks they know everything and start to make stupid decisions. They will learn.
Don’t get me wrong, I am not saying that I know everything or that I am a good investor. All I am saying is that in times like these investors need to be sure they are not reacting on emotion, buying into a market that appears to only be going up in the hopes that they will be rich in a couple of months or years. It tends not to happen that way. My investing mantra can be more subtly described as – slow and steady wins the race.
5 Comments on this post
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Canadian Capitalist said:
I am also finding that everyone I know is talking about investing in commoditiy plays (or at least talking about it). US large caps these days have about the same popularity as toxic waste. If I mention that many of these names have doubled earnings in five years and the stocks have barely budge, I get a predictable, “But the dollar could reach par!”. I love it! I am loading up on US large caps.
May 8th, 2006 at 8:31 pm -
baselle said:
It is really nice and convenient, even, when the peanut gallery leaps in and tells you what *not* to buy.
May 8th, 2006 at 9:53 pm -
The Dividend Guy said:
Yes – good point Capitalist. What goes up must come down!! Out of interest, what US stocks are you buying – if you don’t mind me asking?
May 9th, 2006 at 6:37 pm -
frugal said:
Thanks for your post. Now I’m really worried. That is a sign of a market topping. I bought a junior company in oil in January, and I got 60% YTD return on that. It was an incredible run. The more I look around, the more I think that an intermediate top in commodity market is coming really soon. I have been in this market for the past five years, and I have never been more worried than now. Yes, the ride and return was great, but the higher it goes, the more worried I get.
May 10th, 2006 at 12:21 pm
[...] On The Dividend Guy: The Dividend Guy’s anecdote of some telecom guy investing 25% of his portfolio into junior oils really made me rethink about the commodity market investing. [...]