Holding On to My Britches

Sometimes when you invest in something, a little bit of wild and crazy kicks in, and rather than get overzealous or too excited over it, you have to kind of pull yourself back a little bit and make as realistic an assessment as you possibly can.

Because otherwise you are likely to get burned. And that is never any fun.

I told you that I invested into some of the Shiba Inu hype. And while I think most of the hype is precisely that, hype, there are still a couple of legs to this thing before it all comes crashing down. I have a target price that I think it can realistically hit, and when it does, I am out and moving on to other things without a care in the world for what it does after that.

Like that famous Steve Miller Band lyric says, "Go on, take your money and run."

I also told you that on Wednesday, when electric vehicle automaker Rivian IPO'd and began trading on the Nasdaq, a company I have been following for about three years, I pounced on the opportunity and bought some initial shares of their stock.

Since then, the share price has catapulted 60% in my portfolio.

The thing is, that's a bit wild and crazy. And it becomes all too easy to let yourself get carried away a bit and start joining the wild and crazy in your thinking about what comes next.

We see this a lot from certain folks both in the stock market, and certainly in the crypto markets. In fact, I think in the crypto markets the wild and crazy thinking part gets a little crazier. As soon as BTC hits a new all time high, all of a sudden you have everyone and their brother making price predictions that are literally insane—short term—only to have their hopes dashed when the reality happens, things retrace, and their hopes become dashed.

Even a seasoned investor of 30+ years, such as myself, can get caught up in some of this. Because it is exciting to see something rise in value 60% in a short period of time, and because the whole point of investing is to make money and get ahead in the world.

You start planning for fancy cars, big houses, and retirement. "This is it! To the moon and beyond! Woohoo!"

Of course it can happen, and it sometimes indeed does. Had one invested $5,000 in Amazon stock at the IPO it would be worth nearly $3 million today. Bitcoin and Dogecoin certainly made a few millionaires as well.

But those who enjoy these massive windfalls are also still few and far between. Most of us still have to proceed in the real world. And that means, because we are living in the real world, we have to be careful not to get too carried away, and examine our next move with care and precision.

We have to hold on to our britches, lurking in the shadows of the wild and crazy, and decide what to do next outside of it. We have to pull ourselves back from the wild and crazy and have the ability to see the forest for the trees.

As I watch Rivian skyrocket, I should simply take my money off the table, wait for it to retrace (which it most likely will), and then buy back in when the hype dies down a bit. And I may still do that. When I look at a stock like Rivian, there's plenty of time to make more money on it at some point in the future. I think it's a $1000+ stock 3-5 years from now easily. I have to remove myself from the excitement it could get there in the next few months and simply make wise decisions about where it will realistically be in the next few months—which is probably somewhere between the IPO offering price of $78 and the current price of about $150.

The real value between here and a couple months from now is probably around $114. I got in at $111, just a bit higher than the first open trading price of $107.

I would also have to say that $114 would probably be a comfortable place to add shares at any point in the short term, meaning $150 is certainly a good place to decide to take at least some profits.

The bottom line point is that whenever we make any decision regarding our investments, it is always best to take a step back from the wild and crazy to better assess the reality, and make wiser decisions about what we do. Does this mean sometimes we miss out on some of the upside? Sure. But do we also sometimes save ourselves from losses? Absolutely.

If when things get wild and crazy you plan for the next best move rather than plan for that fancy car, big house, or retirement, chances are doing that will bring you closer to that reality ultimately than hanging on to the idea of the wild and crazy, and leaving too much money on the table just to be retraced back to reality in the short term.

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