Stock Bubbles can seriously damage your wealth!

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In my earlier post, I described one of my mistakes: selling before the stock had had a chance . In this article, I will describe how NOT to invest in a bubble.

InvestorBlogger started (according to my account history) investing in September 1998 a few years before the bubble peaked. It was an exciting time as I would sit watching the CNBC lunchtime shows to find out what was going on.

In 2000 and 2001 I suffered a huge lapse in judgement by buying the ETF called QQQ (or QQQQ) as it is now known. If I had bought at the right time, I’d have done quite well. Anyway, look at the chart detailing the buys. Most of the buys occurred between March 2000 and August 2000.

QQQQ

I originally bought the QQQ at a price that is 65% more than the price is today, and that was already a high valuation. But at that time, QQQQ was reaching 5,000 and there was talk that it would overtake the NYSE.

Well, of course it didn’t. Then as the price deflated after the bubble burst, I kept adding more. In the second transaction, even though the price was down by more than 12%, I doubled my share; and then again at $81.78. After that, the price went into freefall before finally bottoming at around $20.00 per share.

qqqq

Of course, to compound those mistakes, I had already exited some other stocks with lofty valuations, and little business sense (theirs and mine!). So I lost much more than that money: one of the stocks was CMGI.

During those giddy years, we all tried to justify our expectations with the notion that we were ‘doubling down’. But, in retrospect, the only sensible course would have been to get out well before the price dropped below $80.00. At least, I’d have saved most of the capital, and had some small losses as well. But when I finally exited the position, I exited losing 55.84% of the total amount in this stock.

Nasty, very nasty. But finally I had the sense to exit . If I had exited today, I’d still be down over 39% on the total. Of course, my money has been better invested since then, but my total portfolio hasn’t not grown much since then.

Over the next few months, I’ll be adding my other stock disasters. But you can read about NAThere and AMTD. What would you have done in that situation? Did you sell? Did you buy? Or did you wait?

Content edited for corrections a few minutes ago. Graph of QQQQ from Yahoo! Finance. I’ve cut precise dates for ease of reading.

CartridgeFinder.com: Can you find a cartidge that is not listed?

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Ever have trouble buying cartridges for your printers? Well, try CartridgeFinder.com. It is an easy to operate website that you can search by brand and model, just click on the results that show up. Once you found your model on Cartridge Finder, then enter your zip code to get the complete pricing for your residence. Or you can click Price Grabber which opens a list of the different prices.

cartridgefinder

This is the front page, but why, oh why is the search mechanism NOT in the center of the page? I searched for my LaserJet, and found this page.

lj

Clicking on the PriceGrabber function also listed these prices from some websites listing the price at over $155 to prices under $60. Obviously, those merchants selling at hugely inflated prices won’t be getting much traffic!

pricegrabber

Cool tools! So, next time you won’t have to go hunting for cartridges for your printer! I’ll challenge you to find a cartridge this is not listed on their pages!

Is Google getting too big for their boots?

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Many of the higher profile bloggers have recently had their PR ranking dinged by -1 or -2 points by Google for various reasons:

Andy Beard -2

John Chow -2

Problogger -2

And the list goes on and on… I was surprised, but then my own blog has been dinged by -1. Then there are some well known blogs with no page rank at all, such as CashQuests, despite having some hundreds of readers and a high Alexa ranking. So now, we’re all wondering why. Rumors abound about a new system called Trust Rank. But few poe

My own response is really rather obvious after spending a few minutes thinking about it.

If you are serious about making money from your blog, then you will need to focus more on selling advertising for traffic, not for SEO. At the moment, we’ll be waiting for responses from TLA and PPP on this issue. Suffice to say, PPP is already working on their response (called Argus) and I’m pretty sure it’s going to be a much better system than Google has for tracking traffic.

Cut your reliance directly and indirectly on Google. You can continue to serve your Adsense ads, but I suggest that you find other ways to earn money from advertising. I think the online advertising on blogs platform will survive these changes from Google, but bloggers will need to adapt over time.

Cut your reliance on Google search, adapt to using other search engines. You also need to change your behavior in some ways. Don’t entirely give up Google services and products, there are some good products there. But add variety to your online world.

I wouldn’t suggest boycotting Google altogether, but I would like to remind you and of course Google that Google’s success is mandated on the behavior of its users. If we hadn’t started using Google, it wouldn’t have got a multi-hundred billion dollar price tag! At the moment, I don’t think that’s feasible, but we can modify our own behavior in minor ways, and that will have an impact.

How has Google’s regular dance affected you? Do you think things will be different this time? Do comment.