Some Company Leaders May Be Corrupt.

I knew what it means to be “taken for a ride”, but I liked this more expanded definition from Grammarist: “To take someone for a ride means to deceive, cheat, lie to, or murder someone. ‘Take someone for a ride’ – meaning to deceive, cheat, or lie to – originated in Canada in the 1920s. ‘Take someone for a ride’ – meaning to murder a person – originated in the United States in the 1930s as gang slang.” Source:

As you can see, unless you are taking a beloved family member for a ride to enjoy an outing, you might be a rascal or worse. You don’t want to go on a ride with a rascal, liar, murderer, or gangster.

The Rides I Have Endured

If you invest for any length of time in individual stocks, it is likely you bought shares in a company run by a sinner. That is because all company leaders (myself included in past employment) are sinners. Some sinners are more honest, however, than others. They have good intentions and they generally try to be honest with employees, owners, and stockholders. Some however, are scoundrels. In the past I bought shares in a company that was run by crooks. They cooked the books. My shares in the company eventually became worthless. It was a technology company, and it was one of the first stocks I bought, at the advice of my broker. Sometimes the broker knows as little about a company as you do.

I also bought shares in another company that was desperately trying to stay in business. I don’t think they were crooks, but they were incompetent at the very least. As a result, I lost all those investment dollars too. Both investments crashed over twenty years ago. It was a hard lesson, but one worth learning.

A New Potential Ride by RIDE

An investment in Lordstown Motors might be a mistake

Usually, I talk about my investment successes because most of my investments and trades are successful. This time I must talk about RIDE. I may have been “taken for a ride” on this investment. I liked the stories I was hearing, but they might just be stories. As of the close on Friday, my investment is down by $1,235.51. Thus far this is a loss of about 29.5%.

The lesson you should learn from this is, “Don’t buy every investment Wayne talks about or that Wayne buys.” You should do your own analysis and your appetite for risk. You should also be careful not to overbuy an investment just because it is “too good to be true.”

RIDE stock reacting to report from Hindenberg Research

The Big Picture

You might also ask yourself, “Does Wayne have a good investment strategy?” I believe I do, but it might not be best for you. Let me tell you what I am not. I am not a gung-ho growth investor. I am also not a subscriber to the “rebalance your portfolio” theory. Furthermore, I dislike heavy allocations to bonds or cash investments. I really dislike “target date mutual funds” for that reason. Finally, I think the models that say an older investor should move more-and-more of their investment dollars to bonds as they get older-and-older is flawed.

My strategy is, in general, value-oriented and dividend growth focused stocks and ETFs. However, I have non-dividend investments like RIDE, and I also own investments that pay a dividend that isn’t growing. I also own some bond ETFs like PTY, ILTB, and VCLT. As a result of my strategy, my IRA account, which is the largest of our six investment accounts, has done far better than others who use some of the strategies I dislike. However, I have not done as well as some growth-driven investors. I’m satisfied with my approach but you might not be. Although Fidelity categorizes my investments as “highly aggressive”, I am really just “aggressive” compared to those who favor growth-only stocks and funds.

My IRA Results

Before you eat my investment cooking, you should evaluate my performance. If you spend a few minutes looking at the following two images, you should notice that I generally hope to average at least 9% growth over the long haul. That would mean that our assets would double every eight years. My IRA started with about $350,000 that I rolled from my Universal Foods 401(k) in 1999. That means that amount should have doubled every eight years. It has done better than that even with withdrawals. But once again I must caution you: Do not buy every stock I recommend. I’m not always right.

Do not let market behavior drive your investment decisions. Stay invested. The blue line reflects deposits and withdrawals.
My returns are better than a bond-heavy approach and less than a growth-focused investor.

Full Disclosure

I own 200 shares of RIDE. I’m beginning to think that I should sell, but I would like to hear what the management of RIDE has to say about the accusations made by Hindenburg Research.

LINK: Seeking Alpha Article About Lordstown Motors.