Welcome back to my Investing journey series.
Today’s topic will be about 2 of my recent successful exits:
The first stock is CAE which I discussed in one of my last blog posts in which I exited but kept remaining positions for greater profits in the future.
The second position is Ulta Beauty, a Sephora competitor. Let’s get started.
Here is the data for the 2 companies that I exited earlier this week:
The first is CAE which I already covered previously, a software company for educational flight simulation, in the airline industry.
After conducting extensive research, I found that it is a good company and business model and so I bought into it.
The second company is Ulta Beauty, a competitor of Sephora cosmetics.
Ladies, you will know what this company is. It sells cheaper cosmetics compared to Sephora, and is actually quite popular in the United States.
Initially when it came to the beauty industry, I actually wanted to invest in Sephora. I know Sephora is a growing company and I think, “Wow, this is amazing.”
However, after doing a little more research, I realized that Sephora is under LVMH, or the Louie Vuitton company and that changed my mind because it was a little bit more complicated.
It contains many other brands, which I don’t necessarily know of or believe in. Instead, I did more research and came across Ulta Beauty, who I believe also submitted a request for a coaching call within Investing Accelerator.
TIMELINE
I invested in Ulta Beauty in October 2019, and for CAE I Invested in May 2020.
This means that I invested in Ulta Beauty before the crash, which is very important because when it comes to COVID, a lot of people actually lost money.
During COVID, many investing in industries such as retail, restaurants, food, cruise lines, and real estate were heavily impacted.
This is a great example of how you can still make a positive return (even though I invested before COVID), as long as you invest at a discount.
Today, I will go over both these investments in more detail, starting with CAE.
CAE
As mentioned previously, I covered it in a previous blog post because I actually had a 2-part exit. Today I will explain the second exit, in which I withdrew at approximately $24.63.
My entry price was $14.73, which gives me a return of 67% for about 6 months of waiting. Notice I didn’t say 6 months of work, because I really didn’t work on anything.
I simply made a good decision and waited until it reached my targets. This is how investing is really, it is very passive. In terms of capital invested for my last one-third of this position, I entered around $24,452 and got out $40,886. That is a total gain of $16.434, a return of 67% which is not bad at all.
In total, my gain for CAE altogether is rounded up to approximately 53% for 6 months and I am pretty happy with this.
Here is the chart for CAE, showing a very strong trend until COVID, in which it dropped significantly.
At this point, it was on a discount and after I examined the technical analysis part of the company, I realized it was a good buy and purchased when it was about $19-20.
You can ignore the price difference, as this is simply a conversion between CAD and USD. The graph shows Canadian pricing while I display US pricing because I used my USD funds at that moment. Later on, you see that the economy recovers and the stock price jumps to around $32 CAD, which is when I exited.
The green line at $28.90 indicates my first exit, and my second exit is the green line at around $32.50. Now, I have no more positions in CAE.
I would say this is a fairly good trade. When you invest in companies at a discount and understand their business model, you will also understand what they do and how they make money which will make you more comfortable and become more confident to invest.
ULTA BEAUTY
For my second investment, I actually invested in this one much earlier pre-COVID and this position was much larger. I invested $93,204 around November 2019.
I actually used something called Stock Options which is why the share number here does not add up quite correctly, but don’t worry too much about that.
A Stock Option is the right to buy a specific number of shares of company stock at a pre-set price, for a fixed period of time, usually following a predetermined waiting period (usually 3-5 years).
Essentially, this is a “sale price” for stocks and allows me to multiply my profits.
In this case, my entry price was around $70 and I exited at around $99.
Again, I entered at the stock option price. In terms of value, I got $117,900 from this investment, which is an overall gain of $24,696.
This works out to be a gain of 26% over 13 months. If you have been following my blog for a while, you will notice that I aim for a 30% return in 12 months.
Although I technically did not achieve 30% in 12 months because I exited in November 2020, I got to say I am fairly happy with this return. I think it’s pretty amazing, since I invested pre-COVID and still entered at a discount.
I would say I exited with a good return after COVID, but technically COVID cases are still rising in the US and the situation is still quite serious.
The economy still has not fully recovered. A lot of people are unemployed and yet, I am still able to make 26% from this investment.
I do feel very fortunate and grateful because by investing in companies when they are discounted, I am able to protect myself and have a significantly lower downside.
This is very, very important. With these two most recent exits, I made a total gain of $41.130 this week.
Here is the chart for Ulta Beauty
For those of you who are not familiar with technical analysis and how it works, you can register and attend the free chart course I’ve included down below: https://5mininvesting.com/free-chart-course/
In the middle of 2019, there was a drop in stock price here, which is when I did some research.
I did my homework and realized Ulta Beauty was cheap because I knew it was a strong and growing company with a good business model, similar to Sephora and so I bought into it.
Afterwards, the price ended up dropping even more when COVID hit and I tried my best to get in at an even lower price/ I got in at around $224 and my position at the time ranged somewhere between $224-240.
Later, it formed a bottom for a very, very long time, but spiked up to almost $300 recently during Black Friday sales. This was actually my target, but I decided I was happy with the return and took my exit.
The interesting thing about this blog post that I am writing to you now is that if you are reading this in a year or two, or three, or five, you’re going to find that Ulta Beauty has probably gone up.
When you’re investing in a company and you decide to take profits, if you invest in a truly great company, you’ll always exit a little bit too early.
Make it a habit to always leave some money on the table because you will not always exit at a perfect time.
A lot of people feel like they miss out when they exit and take cash but later on, come back and check the investment after a year or two only to find out that it has gone up.
However, this is okay because if you free up your cash here, you are able to invest that into somewhere else. When you invest in a truly great company, it will always go up.
What’s important is that you try to enter at a discounted price, and that you truly understand the risks when you do so. It is also equally important that during the period that you are holding your positions, you get the return you want.
If you focus on these main factors and not what you are missing out on, you will surely make a higher return over time.
You will feel a lot more comfortable and stop punishing yourself for missing an opportunity or two.
For example, I invested in Lululemon many years ago before the stock price went crazy. I made 100% from Lululemon that time.
If you check the stock price today, it actually has gone up, and up, and up, and up. Do I have any regrets or feel like I missed out?
The answer is no, I actually do not because after I exited from Lululemon, I invested in other opportunities like CAE, American Express, and FedEx which I covered in previous blog posts.
FOCUS ON YOUR PORTFOLIO
So instead, you should focus on your overall portfolio return.
If your return is reaching around 10-15% from stocks, that is quite good if you compare yourself to the S & P 500. If you are using stock options, then you need to give yourself a higher standard.
Personally, I aim for 30%. If you are getting 30% using stocks and stock options when investing, this is a fairly good return and you should keep at it.
Remember not to beat yourself up too much when you miss an opportunity, because there are 6,000 stocks across the US and Canadian Stock Exchange.
There’s no way that you will know every single stock well enough and capture every single opportunity. What’s important though, is for the opportunities that you do capture, that they are winners and your portfolio overall is growing at around 30% per year, over a number of years.
As we come to a close for 2020, I will make a blog next of my portfolio return over the past five years. I have been using this strategy for five years now, and so far it has worked out pretty well for me.
In fact, I have been through the oil price crash in 2016, the trade war between China and Trump, as well as the COVID market crash this year.
Now here we are at the end of 2020 - unemployment rates are soaring and the federal government is printing a lot of money, but I think my portfolio is working out pretty well.
If you want to make a higher return and target 30% a year, that is definitely possible if you have the right amount of knowledge, the right strategy, and the right long-term view.
If you put in the hard work, test out different strategies until it works, then you can get there by yourself.
Of course, if you need a little bit of help, I would be happy to help you as well, so click on the link below to attend a free case study. I hope this post helped you learn some things about how to deal with exiting too early or too late when it comes to investing.
So welcome back to my channel. And in this video, we're going to talk about two of my successful exits. Recently one is CAE and that's actually something I entered earlier and exited earlier as well. And I kept the remaining position for greater profits. And the second position is out to beauty. So that's a fora competitor, so let's get started. So now you can see the data here, which I have two companies that exited earlier this week. One is CAE, which I covered earlier. It's in the airline industry. It doesn't fly in airplanes, but it is a flight simulation company. And it has a lot of software related to the airline industry. And after doing our research, I know it is a good company with a good business model. So that's why I bought into it. Now, the second company is called outer beauty. And this company is to competitor of Sephora.
So for the ladies, you will know what this company is. It sells cheaper cosmetics, some with Sephora, and it is actually quite popular into United States. So initially when it comes out of beauty, I actually wanted to invest is the fora. And I know Sephora is a growing company and I think, wow, that's amazing. But when I was doing a little bit more research, I realized that a fora is under LVMH, which is Louis Vuitton, uh, the company. And I didn't want to invest in that company because it was a little bit more complicated. It has a lot of other brands in it, which I don't necessarily know of or believe in. So then instead I did a little bit more research and I came across out to beauty and I think it was also submitted as part of the coaching call within investing accelerator. And afterwards I invested in both of these company for outer beauty.
I invested in October, 2019. You can see it up here on the left. And for CAE, I invested in May, 2020 20. So that means for Ulta beauty, I actually invested before the crash. And that is very important because when you're looking at COVID, a lot of people lost money. And during COVID, especially when they're investing in retail restaurants, food, cruise line, real estate, all of these industries are heavily impacted by COVID. And this is a great example of how you can still make a positive return, even dough. I invest it before COVID, as long as you invest at a discount. So let's look at CAE now for CAE. I actually covered this earlier and I had a two part exit and the first parts I covered in the previous video and this video, I'm going to cover the second parts where I exited at approximately $24 and 63 cents.
And my price for entry is around $14 0.7, $3. So my price for entry is $14 0.73. And this gives me a return for 67% for approximately six months of waiting. Now notice, I don't say six months of work because I didn't really work anything. I just made a good decision and I waited until it reached my targets. And that's how investing is, you know, it's very passive. And when it comes to the amounts of capital invested for my last one-third of this position, I really put it around $24,452. And I got out $40,886. So that is a gain of $16,434, which is a 67% gain. So that is actually not bad. And in total, if I look at my total gain or CAE, which I'll just calculate it right now is 52% and routed up to 53%. So that is pretty good for six months return.
And I'm very happy for it. And let me just show you the chart for CAE. Now, here is the chart for CAE, and you can see that there's actually a very strong trend. If you attend the free chart course I have below you understand what I mean by the strong trend and after COVID it dropped significantly. So it is on a discount. So then after you analyze the technical analysis, part of the company, you'll realize it is good buy. So then I actually bought around this area where my mouse is, and you can see is somewhere between 19 to $20. And the reason why this price is different is because this is the Canadian price. And my price is actually the us dollar price, because I have funds in us dollars instead of Canadian at that moment. So then afterwards, you'll see us as the economy is recovering so on and so forth.
The stock price has jumped to around 32, $32 in Canadian. And that's when I exited. So the green line you see here at 28.9, that's my first exit. And this price, which you see is 32.5 ish is my second exit. And now I have no more positions in CAE. So I would say this is a fairly good trade. And when you invest in companies at a discount and you understand their business model, you understand what they do. You understand how to make money, then you can become comfortable and become more confident when it comes to investing. Now, the second investments I made is actually out of beauty, and this is before COVID and this position is much larger. And I actually invested $93,204 around November, 2019. Now, in this case, I actually use something called stock options, which is why the share number here doesn't make sense.
So don't worry too much about it. If you don't know what stock options are. It just allows me to multiply my profits. Now, in this case, the entry price I got was around 70 something dollars. And I exited at around 99, $98. Now, again, this is the stock option price. Now, in terms of the value, I got out $117,000 and 900 from this investment. So that is an overall gain of $24,696. And this works out to be a gain of 26% over 13 months. Now, if you have been following my channel for a while, you notice that I aim for 30% return in 12 months. So technically I actually did not achieve 30% in 12 months because I exited November, 2020, but overall, I got to say, I'm fairly happy with this return because when I think about the period in which I'm investing in, which is before COVID and I still got in at a discount or out of beauty, and now we're out of COVID ish, the cases are still rising in us.
They, Connie is not fully recovered. A lot of people are unemployed and I'm still able to make 26% from this investment. So I do feel fairly fortunate and grateful because by investing in companies, when they're at a discount, I protect myself and I have a significantly lower downside. And that is very, very important. And basically for the last two exits here, which is the ones I highlighted in green, and I did it this week, I made a total gain of $41,130. So that is pretty good for this week. And let me show you the chart for outer beauty. Now here for outer beauty, you'll see the chart. And for those of you who are really not familiar with technical analysis and how it works, then you can go attend to free chart course down below is, is free. You just register for it. In mid 2019, there was a drop.
And at that point I did my research. I did my homework and no that's outer. Beauty is cheap because I know that it is a growing company is strong. The business model is good and it's very similar to Sephora. So then I bought into it. And then afterwards, this is just where COVID hits. It's dropped more. And I try to get in at a lower price. I did my best. I have to say. And I got in at around $224. So my position is ranging somewhere between 240 something to 224. And then afterwards it formed a bottom for a very, very long time. And recently the black Friday sales, it went up to almost $300 and that was actually my targets, but then I decided I was happy with the return. So I just took it. Now, one of the interesting things about this video that I'm making for you right now is if you are watching this video a year, two years, three years, five years from now, you're going to find that Ulta beauty has probably gone up, and this is totally fine by me because when you're investing in a company and you decide to take profits, and if you invest in a truly great company, you'll always exit a little bit too early.
You will always leave some money on the table. You will always not exit at a perfect time. And this is true when you're investing in a great company. And that is okay because when I free up my cash here, I can actually invest that in somewhere else. So a lot of people feel like they miss out when they are taking the cash away and later on, they come back and check the investment for a year or two and it has gone up. And that is okay because when you invest in something that is great, it will always go up. What's important is you try to get in at a discounted price. What's important is that you truly understand a risk. What's important is that during the period you're holding, you're getting the return you want. And that is what is important when it comes to investing.
And if you focus on those things, instead of focusing what you're missing out on, then you will make a higher return over time. You will feel a lot more comfortable. You will stop punishing yourself because you miss an opportunity. Or two, for example, I invested in Lulu lemon a while back, and there was, this was many years ago before the stock price went crazy. And I made a hundred percent from Lu lemon during that time almost a hundred if I remember correctly. But if you look at the Lululemon's stock price today, you would have realized that it's gone up, up and up and up. And if I always look back, then you will wonder, well, do I regrets? Do you feel like you missed out? And the answer is no, I actually do not. Because after I exited the money from Lulu lemon, I invested in other opportunities like CAE, like outta like American express, like FedEx, where I covered in these videos earlier as well.
So that's why you got to focus on your overall portfolio return. So if your overall portfolio return is hitting around 10 to 15% of your using stocks, that is quite good already, because you want to compare yourself to the S and P 500. If you are using stock options, then you need to give yourself a higher standard. Now for myself, I aim for 30%. So if you are getting 30% using stocks and stock options, when you're investing, then I would say, that's a fairly good return. So you should keep at it. And don't beat yourself up too much when you miss an opportunity, because there are 6,000 stocks across the U S and the Canadian stock exchange. And there's no way that you will know every single stock so well enough and capture every single opportunity. What's important though, is for the opportunities you do capture that there are winners and your portfolio overall is growing at a 30% per year, over a number of years.
So I guess, as we're coming to the end of 2020, I will make a video on my portfolio return for the last five years. I've been using this strategy for five years now. And so far, it has worked out pretty well for me. You know, I have gone through the oil price crash, not in 2020 20, that one in 2016, I've gone through the trade war between China and Trump. I have gone through to COVID market crash. And now here we are at the end of 2020 20, the unemployment rates is super high. A lot of people are out of their jobs. Feds are printing a lot of money. And so far the portfolio is working out pretty well. So I think if you want to make a higher return and target 30% a year, that is definitely possible, but you do need the right amount of knowledge. You do need the right strategy, and you do need to have a long-term view. And if you put in the hard work, test out different strategies until it works, then you can get there by yourself. If you need a little bit help, then I can help you as well. So you can click on the link below and attend a free case study. So that is pretty much it for this video. Hopefully you learned something about how to deal with exits too early or too late when it comes to investing.