When Does a Parent Stop Worrying About the Kids?

Maybe I was naïve, but once upon a time I thought that when my kids turned 18 and graduated from high school that my worries as a parent would be over.  After all, I remember when I was was 18, I went wherever I wanted and stayed out as late as I wanted.

My parents must have had nerves of steel, because now I know that a parent never stops worrying.  The only thing that changes when a child turns 18 is that the parent loses the ability to say "No."  The child can pretty much do whatever, and the parent simply has to hope that the prior 18 years of parenting have taken root.

Patrick heading off to San Diego this morning

Today, our son and seven of his friends piled into two cars and headed off for ten days in San Diego.  Eight freshly minted high school graduates, driving 750 miles away, with no chaperons and no parents, for ten days.  

Of course, when I was 18, I was mature, as all 18-year-olds think they are.  Now, being almost 50, I know better.  Patrick, too, won't know how much he didn't know at age 18 until he's in his forties, too.  That's just the way it is.  

I Never Know When to Sell My Stock

I love to research stocks and find good companies to buy.  The problem that I have is that I never know when to sell them.  Take, for example, VISA (V), which I bought in January 2011 for $70.98 per share.  I bought both V and FedEx (FDX) at just about the same time on the expectation that the economy was beginning a rebound; I figured that those stocks would benefit from increased consumer activity.

Shortly after I bought V, however, the Federal Reserve, in implementing the Durbin amendment of the Dodd-Frank law, began to make waves about interchange fees, the money that credit card issuers charge merchants for processing payments.  The debate took its toll on V, and my position was underwater.

Eventually, the Fed issued rules that were not as bad as what the analysts had feared, and the stock recovered.  By July, V had climbed to $88 per share, so I decided to take my profit and get out.

Here's where I kick myself:  as of this past Friday, June 7, 2013, V had risen to over $180 per share; more than double the price where it was when I sold it.  I left on the table a potential 100% gain within two years!

That's my problem.  I was right about the stock, and right about the reasons it would rise, but I got panicked, and sold the before it could prove me right.  Sure, I made money on it: but I could have made real money on it.

On the other hand, here's Teradata (TDC), which is a play on Big Data.  I'll save opinions about Big Data for another day, but, suffice to say, Big Data is a Wall Street buzzword that has attracted attention.  I bought TDC in January 2012 for $48.25 per share.  For the next six to eight months afterward, TDC followed a trajectory that was practically straight up.  By August, it was at $75.23: I had a 55% profit in only a few months!  In September, TDC achieved its all-time record high of $80 per share.

Of course, you don't realize a profit until you sell; before that, it's nothing more than a gain on paper.  As I mentioned, I don't do a good job of finding the right time to sell, so I held, greedily holding out for more.

What I got instead was a stock that began to founder after attaining that lofty price.  Over the next months and into this year, the stock slowly worked it way back down -- all the way to $53 per share -- almost right back to my initial purchase price.  I had a 50% gain, but I didn't take the profit, and I lost it.

On this past Friday, TDC closed at $56.90.  After owning the stock for nearly eighteen months, I have a gain of less than 20% to show for my investment.  Annuallized, it's only about 14%, and it's less than I could have gotten my just investing in an index fund.

See?  I can pick winners: I just cannot figure out when to sell them and take my profit.