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Winners and losers from my portfolio

Stock recommendations can come from all sorts of odd places. A trusted colleague might give you a hot tip over lunch, or you might overhear someone talking about the next big thing down at the pub on a Friday night. Or maybe you might even be inspired after reading one of the articles published right here at the Fool.

Hopefully, whenever you do decide to purchase a stock for your portfolio, it’s important that you back up your decision with some solid research of your own.

But sometimes, no matter how much research you put into a trade, even the surest money-maker can turn into a lemon.

So in the spirit of humility I’ve decided to look over my own trading history. What follows are some of my greatest success stories, and also some of my biggest failures.

Winners:

Kogan.com Ltd (ASX:KGN) (+161%)

I purchased shares in the online retailer in November 2017, based mainly on articles I’d read by my colleagues at the Motley Fool.

Kogan’s FY17 financial performance had been particularly strong, with EBITDA exceeding prospectus forecasts by a whopping 91%. It’s a great success story, and companies that can surprise the market with explosive growth are generally going to make great additions to your portfolio. I’m just disappointed I didn’t snap up shares in Kogan earlier.

Auscann Group Holdings Ltd (ASX:AC8) (+169%)

Auscann was my first foray into pot stocks. I bought shares in the company in March 2017 after a friend convinced me medicinal cannabis was going to be the next big thing. I looked into Auscann and was impressed by the company’s strategic partnerships with local opium processing company Tasmania Alkaloids as well as Canadian-based Canopy Growth Corporation. These alliances with key industry players at home and abroad seemed to edge it slightly above other small caps in the medicinal cannabis space.

Losers:

WiseTech Global Ltd (ASX:WTC) (-28%)

I got swept up in the excitement around WiseTech in December, and for a couple heady months there I thought I’d picked a big winner. However since then it seems as though WiseTech’s aggressive M&A strategy might have started to cause the company a few headaches. Analysts recently raised concerns that not enough of WiseTech’s growth was being generated organically, and the company was instead relying too heavily on acquisitions to boost earnings.

Other of my stocks in the tech space, like Afterpay Touch Group Ltd (ASX:APT) and Altium Limited (ASX:ALU), which have both enjoyed strong double digit growth since I purchased them, have so far allowed me to absorb my WiseTech losses. But unless the company can post some strong results next reporting season I might have to swallow my pride and sell.

TPG Telecom Ltd (ASX:TPM) (-54%)

Sadly for me I bought stock in TPG in August 2016. Those well-versed in this telco’s recent history will know that this was a particularly bad time to be a shareholder in TPG. In September 2016 announcements of huge planned capital expenditure to fund an expansion into Singapore prompted a massive sell-off of TPG shares. In a matter of weeks I watched half my investment go up in smoke. I’m still hopeful that TPG can turn the ship around. I rate it as the Australian telco with the most
exciting growth potential and so I’m hoping a long-term buy-and- hold strategy might eventually pay off.

Foolish takeaway

In your investing life you’ll sometimes make some bad choices, or you might just get plain unlucky. Maybe I should have foreseen the collapse in TPG’s share price and just waited another month or so. If I had, I’d probably be sitting on a gain right now.

But the best insurance against bad luck, in my experience, has been research and a lot of patience. Maybe you’ll miss out on the odd gain here or there by not acting early enough – like I did with Kogan – but in the long run the extra due diligence will bring its own rewards. That’s advice I probably should have given myself prior to snapping up shares in WiseTech.

And no matter how highly you rate the advice from your friend, colleague, or even one of our Foolish writers, always investigate to see whether you’re willing to take on the risk inherent in any new investment.

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Motley Fool contributor Rhys Brock owns shares of AFTERPAY T FPO, AUSCANN FPO, Kogan.com ltd, TPG Telecom Limited, and WiseTech Global. The Motley Fool Australia owns shares of and has recommended TPG Telecom Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, Altium, and WiseTech Global. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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