It's Been Quite the Week

There’s been lots to digest over the past week…. A week ago this Wednesday, it was the start of Lent. For my fellow Christian sisters and brothers, blessings to you as we journey inward to grow in our relationships with God. Wherever you find yourself in this season, may it be a fruitful one.

A week ago this Wednesday, the Dow Jones was soaring above 21,000. Some readers have asked – What should I do with my investments? In short, I say – stick to your investment philosophy, no one can time the market, take some profits if you have serious gains, examine what is truly driving the market and its sustainability, and continue to speak to your financial advisor to help deal with it all. Check out my blog for previous articles on my views on a rising market. Here’s an NPR story that gives another view – keep investing in low-cost vehicles. I agree but I think this is part of your overall investment philosophy and approach.

A week ago was also the coming out party for Snap, the parent company to Snapchat. While it was priced at $17, everyday individuals like you and me could only get it when it popped to $24. For a reminder on why big institutional investors get preferred pricing, check out my episode on “How the Stock Market Works.”

I did not buy any Snap shares, but plenty of people in the Charisse Says community did and proudly shared their enthusiasm with me. A few messages went like this:

  • “I don’t use Snapchat but I wanted to buy it because it looks like a hot stock. “ – Mark
  • “I would like to tell you that I carefully did my research before making my decision, but I didn’t. It was totally irrational.” - Arianna

These comments underscore that some of our investment decisions are made out of emotion. I want to remind you that money IS emotional. Embracing this reality will help you realize that sometimes these moves will work in your favor and sometimes they won’t. At some point, we all make investment decisions that involve emotion over reason. The important thing is to recognize this bias and figure out how to protect yourself if things don’t go as planned and how to make money if things do go as planned. In the meanwhile, you’ll have to roll with your decisions and learn along the way.

Time will tell whether Snap will be a good investment. I must admit, I downloaded the app for the first time this week. Here are a few things that stick out to me:

  • In its IPO filing, Snap identifies itself as a “Camera company,” and this rationale is spelled out in this worth-the-read Vox article. Others have put Snapchat in the social medial box, and pointed to the reality that Snap has eaten its social media competitors for lunch when it comes to going after the 18-34 market.
  • Snap recorded $404.5 million in revenue in 2016, compared with $58.7 million in 2015. Net losses grew to $514.6 million in 2016, compared with a net loss of $372.9 million in 2015. As mentioned in this Market Watch article, Snap warned that it “may never achieve or maintain profitability.”
  • The owners have an incredible amount of control and ownership. The company has three classes of common stock, and its common A stock does give stockholders any voting power – Wow!

Want to share what has stood out to you or why you invested (or did not)? Please leave a comment on my blog. It will be fun (yup, fun for me and perhaps for you too), to see Snap journey in the public markets.

Until then, enjoy the rest of your week.