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The Adrenaline Junkie In Me…

The following is a guest post is from my younger sister, Ambi (short for ambitious).  She’s a recent college graduate, started her first post-college career here in Houston, and has been living with us since January.  Please give her a warm welcome! 

Investment Opportunity

Maybe I am an adrenaline junkie, but here’s my latest radical decision.

Currently, I am very actively looking to invest in Groupon stock.  After hearing its disappointing last quarter’s numbers and reading former CEO Andrew Mason’s blunt exit email, I want in. No, I don’t have an emergency fund that is 6 months worth of my earnings.   No, I have no experience with stocks.  No, I have not even held my job for 3 months.

I understand how choosing to invest in a tanking company that just fired its CEO, based on an unproven coupon business model, may seem unwise.  Here are my three justifications:

1)  I see a great opportunity.

Groupon stock held a high of almost $20.00 a share at one point in time, and while I do not even pretend that Groupon stock will ever be worth that much again, I do see it rising above its $5.30 a stock current price.

2)  I feel secure in my current financial state.

I don’t have debt.  Additionally, I have no dependents I am supporting, nor do I have any other fiscal responsibilities other than my personal living costs (rent, groceries, transportation, and savings).  While I do have a sales job, my base salary is not effected by my additional commissions, and I live comfortably off my biweekly checks.  I even save.  And when the time comes I do start earning commissions, I intend to save each part of those checks, building a nest egg.

3)  I will personally enjoy the highs and lows of my stock.

I think people want to avoid making investments effect their emotions, but this is where I gamble.  I do not go to casinos – I do not like losing my money on games that are rigged for the casino to win more often than not.  But as I watch the stocks plummet on Bloomberg, I want to be a part of the Groupon ride. With a new CEO, I have no idea what will happen, but that is why I am investing a very small amount that I do not care if I never see again.  Everyone I know uses Groupon, so if it does tank, honestly…I will more effected by the loss of actual deals than the amount I invested.  And should Goupon do well, I would love for its stock to be my first portfolio stock.

So, I am currently looking at purchasing 60 or so shares.  If I never see that money again, I won’t cry.     And should Groupon turn around, I will be thrilled.

What do you think?   Is this stock just too risky for your financial taste?

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15 comments to The Adrenaline Junkie In Me…

  • I do not like the volatility, but my asset allocation helps me to avoids all the swing. I love seeing my portfolio grow. I don’t know if that is being an adrenaline junkie though.

  • I don’t think I would invest in Groupon. I don’t think what they do is sustainable into the future.

  • Ugh. Groupon is horrible. It’s not just a low stock price, it’s a failing business. The last analysis I read said they were losing $13 per sale and $3 per lead. You can’t make that up in volume.

  • Welcome Ambi! I don’t invest in individual stocks because I don’t feel like I know enough to do well and not lose all my money (which I would be upset about). Maybe buy a few shares of Groupon and a few of something else? But if you don’t mind losing the money if it doesn’t work out, it wouldn’t be the end of the world (and probably a good learning experience).

  • I’m with KK and don’t do individual stocks. However, I like to play around with some stock simulations and have never put Groupon in my fake portfolio. I just don’t see it as sustainable, either. But then again, sustainability doesn’t always mean that it will perform well.

  • I would also recommend shying away from individual stocks. However, to not take my own advice, I invested heavily in AIG right after it plummeted, and was thrilled when the stock rose back up. I bought in for $1.90 a share, and it was skyrocketed since. If it is money you dont care to ever see again, it’s your call. Here’s to Groupon growing like gangbusters!

  • Groupon is on the way down and will stay down or disappear forever. It is not a sustainable business.

    Pick something you like and use that other people will continue to use even if the economy gets rough.

    An example of that are the bank and a major Canadian food manufacturer that are in my small portfolio.

  • MikeS

    Welcome Ambi. I would liken the investment to going to a casino, more or less like entertainment. If that’s the case, then I have no problem with it. I like to gamble myself, just don’t get to do it that often.

    Good luck!!

  • I’m not a fan of the stock. I think the opportunities for growth are limited, especially that they have competition and low barriers to entry.

  • Groupon hasn’t been around long enough for me to invest in it

  • Depends! Always have to be sure to do one’s due diligence on every investment, regardless of how much risk is involved. Great post!

  • Not a solid investment choice. If you are a personal finance blogger you should really read up on how the stock market works. I recommend reading A Random Walk Down Wall Street. Or at least look up strategies of index fund investing.

  • retired

    Nah, don’t really think its a good investment. I would go for long term if I were young, lol, I go for long term and I am old. Pick out some stock that gives you a dividend, you believe in, and that has “real”, actual physical assets as well as a market. You will get a thrill ride, because you won’t expect it to plummet. The real adrenaline rush will be when it recovers time and again, while flash in the pan stocks dwindle and disappear. Whenever the Feds lift the interest rates, pull out of the market some and invest in a more guaranteed return. Just like 401K’s, building up long term stock pays off, especially for those with time (the youthful). 401K’s are mostly just long term stocks, loans to entities, and investment in the place you work. Most investment firms trade too frequently, charging the trade and judgement calls to their customers; so I see no reason you should not invest; but there are better stocks to buy than Groupon.

  • ODWO

    (For me) I tend to not Buy and Hold stocks anymore. I used to “play with stocks” – meaning: Buy and Hold, no matter if for long or short or very short term. I have a different idea of what a ROI should be and how to get it, with minimal risk.
    I still play the markets, just not with stocks.

    People who visit casinos … they go for the rush (adrenaline). Pull the lever, roll the dice. To avoid getting too caught up in that … and keeping your money, learn all the things there are to know about price action, timing (with charts) and a few other things … I had a much longer post here, but instead decided to keep it short.

    Ms. Ambi …. Being ambitious is a good thing. Don’t try to push the limits … the (stock market) isn’t what you are fighting against. The market does what it does. We are the unpredictable ones.

    Good Luck!

  • Ambi

    Hello BFS Community! Thank you all the response and advice!

    In retrospect, this was probably too rash an introduction for everyone to give me the benefit of the doubt on my fiscal responsibility. I would like to re-iterate: I am supporting myself fully, have no debt, and do save almost half of every paycheck (seriously). I am purchasing Groupon stock really just to play a game – not to make money. I do not care if I lose every dime.
    The point of this post was to share a very odd decision I made with a very small amount of money (even relative to me), and why. At 5.30 a share, 60 shares is a bit over $300, plus transaction costs. Again, it’s small amount that I actually received back on a deposit from college.

    Johnny – I am actually very versed in the stock market, which is why I am not trading serious money.

    Currently, I am investing in my Roth and 401K, but when I do start actually investing in the market, I will have a very different portfolio built on different principles. Thanks for the concern!

    Thank you again for all your comments – please keep them coming! It is so nice meeting you all.