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How I ended up buying Fastweb (BIT:FWB) and why I shouldn’t have. January 29, 2007

Posted by deminvest in European Stocks, FWB Fastweb, Internet stocks, investment, Italian stocks, Single stocks, stock I own, stocks, stocks that pay high dividends.
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Fastweb is an Italian telecommunications company. It is the only Telecom-Itlalia’s competitor that has a large “last mile” network able to reach directly customer’s homes.

I bought FWT stock for 5 reasons:

1) I want to invest more in Europe: US stock-market is very high and US had a scary trade deficit.

2) FWB came out with good results, better than expected by analysts.

3) FWB has nice dividends: dividend yield over 9%

4) I believe that FWB can be the most serious competitor of Telecom Italia because of its fiber network.

5) Price of FWB went down suddenly even though its results were better than expected making it cheaper for me.

the first 4) reasons are good reasons for a proletarian investors like me. What killed my investment was reason n. 5.

I wrote it before… but… DID IT AGAIN!

Small investors like us should never buy or sell or do anything when stock-prices are moving too fast up or down or when speculation is pushing a stock. That situation is a loss for us, because we will trade with big sharks who often have a great advantage over us: they have news that we don’t have.

Fastweb was going down because it’s CEO sold huge amounts of shares to invest in a stupid Internet TV company he owns. Not nice. Then a few days afterwards it came out that largest bank is also selling part of its Fastweb shares. Horrible.

I should have waited when I saw there were too many news on that company and it was moving down too fast, but NO. I thought I would buy cheaper… and the result is:

On 16/01/2007 I bought 25 shares of FWB for Euro 43,558 each and I am already losing 8,5% on them. The worse is that stock markets went up while FWB went down.

Next time I will wait a week untill stock price stabilizes before trading on a stock moving too fast.

Comments»

1. len - January 31, 2007

hmmm we never learn our lesson. maybe one should come up with a matrix of conditions to sytematize decision. is that possible?

2. deminvest - January 31, 2007

Yes, possible, but there is a big problem:

I tend to put up conditions, then take decisions outside those contitions because of childish enthusiasm about some investment opportunity that I imagine to really great and requiring intant action. But I am getting a bit better in resisting that kind of temptation.

Unfortunately I could not resist Fastweb’s sirens!

3. len - February 1, 2007

thanks. ur right. it’s difficult to be calm in the enthusiasm.

4. Fastweb (FWB): IPO pioneers lose 68% on “friendly takeover bid”. Sad story for “we, the people” « Democratic Investments by the people for the people - March 12, 2007

[…] 5) I buy 25 Fastweb shares  […]

5. artfunkel - April 27, 2007

It’s okay to lose on a trade overall. What you have to do is develop a portfolio with several investments, with variety. Always trade as a portfolio, with each trade costing initially the same total cost. That way you can handle some losses, while others may win. You had an idea, and went for it. Take a deep breath and try to build a portfolio, and don’t forget to minimize losses with stops.

6. deminvest - April 27, 2007

You are right. I should have more discipline, but unfurtunately sometimes I see I stock I like, I go crazy and I buy it outside my strategy. I did so today buyng 5 Google outside any strategy.


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