Shares From $1m to $5.2 in 24 months

Sounds nuts and it is. There is a story to it. My son has a genetic disorder that as he passed through pubity emerged. He went from studying Computer Science at Sydney Uni full time, to studying 50% load to giving it up and working as a casual warehouse guy in a computer hardware business to eventually being laid off, as due to his situation worsening he was not reliable on shifts. Best worker and they did what they could for him but let him go. I went from retiring at late 50s (after working 6 day weeks 50hr plus) for 17 years in my 30s and 40s, to continuing on as our retirement plans meant we needed to cover three adults not two. He also could not socialize normally as he needs to avoid air conditioning and usually has his eyes shut by 9.00pm. The next one came when 4 years ago he told us he had to move out as Sydney''s weather was very painful. It would also keep his sight longer. We eventually bought him a house in Coffs (over 25% of our retirement funds) and I was glad I kept working. As he was home all the time and a natural IT guy he played a lot of computer. He also had almost been killed in a car accident at 16 and had a $150K settlement that had grown to $220K before GFC and then crashed to $160K. That was the end of external planners and he decided he would invest for himself.
We then allowed him to trade in our super fund. (yep pretty brave but he would either succeed or we would loose and he would stop). It was basically more about giving him hope for his mental health than anything else. He lost on Billabong and Elders and that shook him but I told him with companies know who you are investing with. Know the product the market and the people who run it. The Aust Fin Review is a sales mag. It runs press releases and calls them articles. He then took that experience and looked like he was just watching for the next few years. He had always liked AMD as a product. He backs underdogs. When the new CEO came on board he bought in at $2.20. He soon had a mill. That had been his goal to have a mill by 40. He was 35. My wife and I had 10,000 shares bought at around $6. I was not really paying much attention until she showed me he had made that mil. I said to my wife imagine if we had 20,000 share or even 40,000 shares. At the time AMD was around US$12.50 -14.00.
What a huge risk. To back someone with no real track record. Was he just lucky or did he know his stuff.
I visited him and stayed there for a few days. While there I saw him spend almost all his spare time on podcasts, youtube reviews, pre-release product analysis. As I walked through the lounge room he said watch this. He played on the screen, a fist person shooter game with the best Intel chip and then the AMD. I saw no difference. Once more, I saw no difference. In quiet frustration he walked to the screen and pointed at the blood splatter. "now watch again" . "Wow you are right, much better". I realised that my 35 year old son, unemployed for over 10 years had not just given up. He had worked hard and found something.
Went home to my wife who always had confidence in him and said, put it all in. That was in 2017 it then dropped down from $14 to $10.00 in early 2018 but she held firm, "trust him it will hit $30 within three years, " and then boom.

Oh yeah he has now gone from $1M to $3m as well. Buying him that home was the best investment I ever made. He was the healthiest he had been since 16, his mental state improved and now he is financially set.

Lesson in this was know the CEO. When she joined she bought millions of shares.

 

Good to hear a positive outcome. How did he evaluate the companies? Just based on product knowledge and trend forecasts or was he digging through financials?
What's he eyeing on during this crash?

 

"Ryzen > i7"

 

He learned some very cruel lessons when he started. Both Billabong and Elders had the stink of insider trading, bogus press releases. He learned that following the AFR put you with the herd, and Coshies tips may be helpful but did not replace analysis.

I am a professional accountant and have clients continually moaning about Planners fees, and wanting to do there own SMSF share trading. We advise them to consider carefully as it takes a lot of work. Most think it is buy and sit.

We all made a big decision many years ago to get out of the OZ share market and into the US. We moved over time but from 97 down to 79 US cents to our dollar. As an accountant in my view, I can tell you that the OZ market is rotten and full of bogus news and insider trading. It is too small to be a real free and fair market.

Those few days I stayed with him he was either awake very early watching the US close, or if he felt it may be volatile he would get up and stay awake until he thought the moment had passed. He had no job but I think he worked harder at this at times than many with 9-5.
He also had a intimate knowledge of product from his interests, Uni study, and warehouse work. He told me that before AMD's latest was released the major games in development were a year away but based on hardware which had not been yet publicly released.

He day trades now successfully, he spends a huge amount of time studying economies, media announcements, projections but AMD was for him a once in a lifetime opportunity. Just the right timing. It has dramatically changed his life. I used to look at him and think how life had been so cruel to him. He was such a good kid. Rare chance of Karma

In 2019 June, it was the hottest stock in the US for that year.

 

The other thing was he was trading very small for several years, while reading charts, blogs, everything he could, and learning more and more. I think one of the big mistakes is the promise that this course or book or whatever will help you trade successfully from day one. I think everryone is super keen to get going but if we had not let him lose money in our own fund I don't think he would have had the experience or confidence to do what he did. It takes time and hopefully not too many losses to get that experience.

 

This morning it was $5.7m. Down 200K or 3.33%. Nuts. Doomsday everywhere but in our investment is up 58.33% since 30 June !!!!. Last year was driving my 2009 Volvo C30, this year same car one year older. Only change is I can't sit and have a coffee anywhere. World is just nuts.

 

Great read. Congrats

 

Any up-dates?..

 

To provide a little context (& also to consider or compare currency risk).
AMD (up 60.0%)
1/7/19 $31.20 USD = $1.56 AUD (or $0.69639)
1/5/20 $49.88 USD= $1.44 AUD (or $0.64162)

Compared to their largest competitor Intel (up 19.6%):
1/7/19 $48.05
1/5/20 $57.47

 

So that is how he made it.
Thank you for sharing.
How does he intend to keep it? Apologies if I am reading it wrong but is he overweight in one stock?
What is his risk mitigation strategy?

 

Just an update. My wife and I are the ones I wrote about. Our son keeps his stuff separate. We just tag on behind him. He has gone from around $1.8M in June, last year to just hit $5M last night. In around Aug 2018 he hit $3M briefly so not such a big jump really, but as you can see AMD peaked then and then dropped. He actually got out at the top but took a big stance against the market and dropped around $500K in a month. Owch !! Very sobering for him, lots of lost sleep (he has 100% US). He had worked back to $3M in around Feb 202, and again has been working very hard in this once in a lifetime moment. He does not talk to us too much as we kind of stress. As I said he has a health issue and normal work is not an option, so this is IT. NO PRESSURE.


Now regarding us, we are top heavy in shares in our SF, we are holding about $1M in cash, which we can draw down when we want and cover everything for our family for a while (including giving the other son a help with his deposit) with the rest being one stock. We however have a strata office in a city with major construction, and it will be knocked down maybe next cycle for a new apartment tower, in the meantime it is around 3 1/2% net return, though think that will take a haircut, and we are on 5 acres on the city edge although the development has rolled way past us now but developers are circling. I was looking at the AMG hatch last week, you know the thing, you can afford it, you have always admired them, but my mindset has not changed. I guess it never will and I can't see us owning it. We can easily buy into Hunters Hill but our values are different, we would be strangers in a stranger land (to quote Heinlien).

Our son will also settle into solid assets just so he can holiday and sleep at night. He is already talking about buying our strata, making an offer on a couple of houses in his cul-de-sac, and putting a very big chunk in managed funds. It will be interesting to see what he does. Current life is high stress and socially isolationist. Hopefully he can hold it all together until then and put the right blocks in place.

But it is a hell of a ride.

 

He is heavy but not overweight, especially last two months. He has been very active, changing stocks and positions and even back into OZ. Regrettably the mitigation strategy is simply his knowledge (often earned at a heavy price) his ability to handle stress and reality of many sleepless nights.

 

I think the lesson here is invest in stuff you know about.

 

Very good story. Reminds me what the best way to make serious money on the share market (as opposed to punching out an above-average 10-20% return pa) is to find something you really get/like and just leave it there. And normally it's not a blue chip. Well done

 

Good story, how he made his first mil I missed.

 

I am up 60% on NIVIDA ( gaming graphics, AI) since mid December, they are up 130% since 1/719.

 

Still flying I was going to say. Graphics card gaming is nuts during lockdown.

 

Up date, AMD has hit $76 after the Intel face plant and now is the higher stock. We hit $6.8M last Saturday, so $1M to $6.8 in 28 months, jr has done $800K to $8.7M in same period. Cov is terrible but these crazy markets come around only once every few decades. Feel like those people who won a lottery. All of a sudden my wife has turned into a 1,000 pound gorilla ... she can now sleep wherever she wants. Hope everyone out there survives this madness. World is nuts right now. I have a lot of clients in SMSF's and they all tend to be heavy in banks, property trusts and blue chips. Right now that is like buggy whips and stables. This year, when we come around to doing the tax returns it will be interesting to see how they fared. The biggest worry will be those people in neg gearing SMSFs who have lost or will lose the job/income. Strange year will only get stranger. Stay safe everyone.

 

Stupid, US$85 today.

 

Keep updating us @Terry E. Love reading this. It’s incredible.