Friday, May 18, 2012

Facebook & VXX


It was a nice sporting event to watch this morning as the the worlds most popular social media company went public. I must admit there were moments of weakness when I thought I should simply put in an order for 100 shares and claim my stake in history.

Turns out I didn't and much to my pleasure I might add. I suspect I will look back at this day and kick myself for not buying into it just like I look at Google today but I think my investment interests have moved beyond that thinking.

The rationale behind my not buying it today is the following. A 100 share lot would cost be 4000$ and 100% upside would give me another 4000$. But do I have conviction to hold on when the stock is falling; probably not. These days I hate holding stocks for which I do not have conviction to hold on atleast for a 30-40% drop. Its way to costly an experiment to run with my hard earned money.

Now if there were options being traded today I might have bought into it, but I couldn't find any. I guess regulators are clamping down on that. So I think I will stick with my current strategy of accumulating the stocks that I conviction in, though the weak market is making it hard.

On a side note, my VXX play is finally in +ve territory today. Looks like the market had some serious downward bias and VXX is spiking. I hope to hold on to it through May and see what June brings. Hopefully it will make holding my longs that less painful.