Enroll in Hindsight U! Where I’m sharing today what I wish to have known a long time ago. How many of us found ourselves learning about investing and personal finance only after entering the workforce? How many of us lament not having the knowledge and foresight to drop our life savings into Apple or Amazon when we were 18 years old? Hindsight is 20-20. But it’s not too late!
I Bought A $150 Stock For $4
Weekly Newsletter
I Bought A $150 For $4
It's true. Back in November 2019, just prior to the pandemic shutting down the country, I took up a position in Celsius Holdings (ticker: CELH). The stock was trading at just under $4. At the time, very few people knew anything about Celsius. But I'm guessing most reading this newsletter today have heard of it.
Celsius is an alternative energy drink company. It sells carbonated, low-calorie energy drinks which are scientifically proven to help burn fat. At least that's what the company claims. Go into any Walmart, Target, or gas station these days and you'll find Celsius alongside Monster Energy and Red Bull. Side note - it's pretty good.
In 2019, I discovered CELH while screening for stocks on Fidelity (one of my favorite screens here). At the time, CELH was a micro-cap company. It screened off-the-charts for revenue growth and was on the verge of profitability. I was intrigued, so I scoured the company's Investor Relations site, listened to its most recent earnings call, and read the latest 10K/10Q. Anyone with eyes and basic investing knowledge would've seen what I saw in 2019.
So, I bought it. And today CELH stock is at $150. From my purchase price of $4, that's a 38-bagger ($150 divided by $4)! A 3,650% return in less than 4 years! I'm a friggin' genius!
Except...I'm not...because I sold at $16. Why? Fear. Fear that CELH was going to crash and I'd give back all my gains. Fear that it just couldn't go any higher. Fear because the P/E was too high. Fear from watching the dang stock price every day.
The one thing I didn't focus on, which cost me $1,000s, was the fundamentals. Celsius, the business, was firing on all cylinders. And all I had to do was nothing.
Folks, when you find a stock you understand and believe in - buy it. And bury it in a time capsule in the backyard. Don't cut it off at the knees like I did. Give it a chance to do what you believe it could. Let compounding work its magic!
Crocs, Inc.
Crocs, Inc. (ticker: CROX) sells a product that's been going out of style for 20 years. But like Chuck E. Cheese, it's a company that just won't go away. In the early 2000s, everyone thought Crocs was a fad. In the early 2010s, everyone thought Crocs was a fad. In the early 2020s....well you get it. I, for one, think Crocs is here to stay and will continue to be a sound investment over the coming years. And with Crocs' recent acquisition of Hey Dude brand, I like it even more. Debt on the Balance Sheet is one thing to keep an eye on.
Here are the compounded annual growth rates (CAGR) for Crocs over the past 10 years:
- Revenue: 12.2%
- Assets: 18.4%
- Free cash flow: 18.6%
- Earnings per share: 19.7%
Enviable results by any measure. But don't take my word for it. As always, I encourage you to do your own homework.
Quote of the day
Tip of the day
Check your stock portfolio monthly, not daily.
Watching the market every day is a surefire way to get caught up in emotions, which tends to lead to bad decisions. Instead of watching the market daily, check on your investments monthly or even more infrequent. If you're stressed about not checking your stocks daily, it may be a sign you're too heavily concentrated or too heavily invested. Listen to your gut. If you can't sleep at night, chances are you need to make some moves in your portfolio.
Relevant Articles
Here are a few articles relevant to my lamentations on Celsius Holdings. Be sure to give them a read. They may help you avoid a similar fate!
- 3 Tools Every Investor Needs To Analyze A Stock
- How To Screen For Quality Stocks Like A Pro
- 4 Reasons To Sell A Stock (9 Reasons Not To)
Welcome to HINDSIGHT UNIVERSITY!
by Caleb McCoy
Enroll in Hindsight U! Where I’m sharing today what I wish to have known a long time ago. How many of us found ourselves learning about investing and personal finance only after entering the workforce? How many of us lament not having the knowledge and foresight to drop our life savings into Apple or Amazon when we were 18 years old? Hindsight is 20-20. But it’s not too late!
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